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What is the best strategy to lower the tax impact of a SSDI Lump Sum? Are there circumstances where I would be better off filing an amended return for 2017?

Forum|Forum|7 years ago
June 5, 2019
2 replies
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In 2018 my wife started receiving SSDI. She received a lump sum of which about 2/3 was for 2016 and 2017. Because of my income most of the payment is taxable. I did enter the year's separately in Turbo Tax. However, I am not sure what the ultimate tax impact is of the fact that a portion of the lump sum was for years prior to 2018.

TurboTax Deluxe Windows

Best answer by fanfare

you have two options in this situation

the way turbotax did it
apply all the payment to 2018

you can file the way that gives the better results.

to apply option 2 enter that the entire amount was for 2018 benefits.

fanfareAnswer

Employee

you have two options in this situation

the way turbotax did it
apply all the payment to 2018

you can file the way that gives the better results.

to apply option 2 enter that the entire amount was for 2018 benefits.

W

weinreblsAuthor

Thank you, will turbo tax automatically do this calculation for you and pick the best one or do I need to manually check both ways and see what provides the best result?

C

CynthiaR

Your wife received a 1099 SSA from Social Security Administration for 2018. The amount that is showing in Box 5 is the amount that has to be reported on the tax return regardless the year it was for. You cannot amend 2016 and 2017 return for that because she did not receive it until 2018.