Question

On my 2021 Return, I enter $56,796. (line 6a) and TBX software calculated Taxable Amt. (line 6b) as $8,041. Is that correct?'

Forum|Forum|2 years ago
September 1, 2023
3 replies
0 views

The IRS wants me to penalty for NOT showing FULL $56,796. amount. Why was the Taxable amount reduced to $8,041. ?

TurboTax Online

Employee

You must have misunderstood the IRS letter you received. The taxable amount of your Social Security benefits reported on Line 6b cannot be more than 85% of the total benefits reported on Line 6a.

Up to 85% of Social Security Retirement/Disability/Survivors benefits becomes taxable when all your other income plus 1/2 your social security reaches:

Married Filing Jointly - $32,000
Single or Head of Household - $25,000
Married Filing Separately - 0

What exactly did the IRS letter indicate?

D

drdave48Author

Thanks for the specific detail on the tax computation.

We had additional income we didn't get mailed to us, so there was extra income which required additional tax plus penalties. Now I know where to look in the future. Thanks for your follow-up.

VolvoGirl

Employee

So the IRS didn't change the taxable SS on 6b to the full amount on 6a, right? Just increased line 6b.

To see the Social Security Benefits Calculation Worksheet in Turbo Tax Online version you would have to save your return with all the worksheets to your computer. Or if you are using the Desktop CD/Download Software you can switch to Forms Mode (click Forms in the upper right) and click on SS in the list on the right side.

G

guywong

The amount of taxable social security is dependent on your other taxable income and your marital status. Take one-half of your social security benefit of $56,796, or $28,398. Add that to your other taxable income. Subtract $32,000 from the total if you're married, filing joint, or $25,000 from the total if you're single. Divide the balance by 2. The lower of that amount or 85% of social security benefits is the taxable amount of your social security.

I cannot imagine either TurboTax or the IRS would make a calculation error on the taxable amount of social security. No one pays tax on the full amount of their social security benefits. The maximum taxable amount of your social security is $48,277 (56,796 x 85%).

For more details, see this IRS webpage:

https://www.irs.gov/newsroom/dont-forget-social-security-benefits-may-be-taxable

VolvoGirl

Employee

The IRS probably changed or added some other income which made more of your Social Security taxable. Unless you entered a 1099R or something else on the SS line. Did you get any 1099R forms? Do your lines 4a 4b 5a and 5b look right? They usually change the b line.

If you entered a 1099R on the wrong line (4 or 5) the IRS won't see it and say you didn't enter it.