HOW TO DEDUCT REPAID SOCIAL SECURITY BENEFITS

[KCash77]

I have someone who repaid her Social Security Benefits and received no payments. The only amount in Box 5 is negative ($15957.00). I figured the tax using the Deduction and a Credit. The deduction result in lower tax. The IRS instructions state to claim the deduction on Schedule A, Line 16. There doesn't seem to be a spot for that. Does anyone know where I would put the amount

[chasetax · Accepted solution]

go to line 16 on sch a, double click and you will open a new form then go to line 31 claim repayments

[KCash77]

Thanks Chase. I thought that was where it might go, but I wanted confirmation.

[Terry53029]

If the amount is more than $3000, as in your case you have more to do than just where to put the amount. This is from pub 915:

Repayment of benefits received in an earlier year.

If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you may be able to deduct part of this negative figure that represents benefits you included in gross income in an earlier year, if the figure is more than $3,000. If the figure is $3,000 or less, it is a miscellaneous itemized deduction and can no longer be deducted.

You need to research pub 915 to see the steps you need to take.

[KCash77]

Thanks Terry. Yes, the repayment was all for 2018 SS income. The re-calculated tax for 2018 was lower than the amount of savings a deduction in 2019 would yield. It states in the instructions the method that results in less tax may be used. So, deduction for current year, $15957.00 vs a credit for prior year. The deduction would result in less tax. Does that seem correct to you?

[Terry53029]

Without seeing last years, or this years tax return I really don,t know. the ones I have done, as I recall I used deduction for current year

[KCash77]

I did it both ways, deduction for this year and credit based on last year's. The deduction this year will result in $285.00 less tax. Thanks.

[Maxine]

I am sure you are aware, but I don't see it mentioned.  You only use the amount that was actually taxable in the prior year to figure the credit or deduction.

[KCash77]

Yes. Thanks.