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When I pay back a large social security overpayment received in a previous year, how do I get the taxes back that I paid when I received the overpayment?

I had to return money to the social security administration this year because they sent too much last year.
 I paid taxes on some of this "over payment". How do I get the taxes back?  The amount is over $3,000.
    Here's the IRS's instructions (the references are to 2010 but apply equally to 2011):
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    Deduction more than $3,000. If this deduction is more than $3,000, you should figure your tax two ways:

    Figure your tax for 2010 with the itemized deduction included on Schedule A, line 28.

    Figure your tax for 2010 in the following steps:

    Figure the tax without the itemized deduction included on Schedule A, line 28.

    For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Then refigure the tax for that year.

    Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts.

    Subtract the result in (c) from the result in (a).

    Compare the tax figured in methods (1) and (2). Your tax for 2010 is the smaller of the two amounts. If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71, and write I.R.C. 1341 in the margin to the left of line 71. If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28.
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    If you prepared last year's return on (desktop) Turbo Tax you can just go back to your filed return and eliminate the Social Security benefit to determine how much your taxes change without Social Security to determine if you are better off taking the itemized deduction in this year's return or a credit for last year's return.  If you take the credit it would be entered under the "Other Credits" section of the "Deductions & Credits" tab.

    Tom Young
    • Sorry,  could not be a more confusing answer.  Repaid social security back about 10,000.   What is the simplest way to get the tax back on that with out going into last years stuff and adding and subtracting and whatever the heck.  I use turbo tax deluxe.  Seriously.
    • The instructions aren't mine, they are the IRS's.  Seriously.

      Simplest way is right there: "Figure your tax for 2010 with the itemized deduction included on Schedule A, line 28."  Take the amount you repaid as an itemized deduction.  

      Thanks for the ding.

      Tom Young
    • This is the same answer as TomYoung gave, in different words.

      Repayments. This situation is  described in IRS Publication 525. pgs 36-37.  You can take a  misc itemized deduction, on line 28 of schedule A (not subject to the 2% of AGI threshold) Or you can take a credit. The credit is computed by refiguring the tax return from the previous year as if the income had not been received. Then the difference in tax is claimed as a credit on the current year's return.  In the forms mode (the forms mode is not available in the on-line versions of TurboTax[TT]), you can use the line 70 smart work sheet to enter the credit amount on line 70; select item F, claim of right under IRC 1341 for repayments. TT will  enter "I.R.C.1341" in the margin of form 1040. TT does not do the calculation or compare it to the alternate deduction.
      So, the taxpayer  has the option of either claiming the credit or deducting the repayment as a miscellaneous itemized deduction, whichever provides the greater benefit. But, you cannot file an amended prior year return.
    You, however, are using the online version, so you cannot enter a credit as described.  You can go to Deductions and Credits, Explore on my own, Other Deductions and Credits near the bottom, choose other deductible expenses.  Keep going until you see the screen asking if you had deductions not subject to the 2% subtraction.