Prior year Soc. Sec. benefits pd in 2005

[Bird Legs]

Client, in 2005, had wages, $ 1500. 1099-R $39,500. & interest income of $100.

Client was on the police force. In 2005 he received SSA-1099 showing
net benefits for 2005 of $75,010. This includes Paid in 2005 for 2004 $20,976.
Paid in 2005 for 2003 $20,544. and paid in 2005 for 2002 $13,512.
Question what is the best & easiest way to compute the income tax on the prior year
Soc. Sec. Benefits?
Thanks everyone

[Chief]

SS Benefits

There is a worksheet for figuring these benefits. I believe it is in your software.

[Bird Legs]

Thanks Chief

Will check this out. Had not thought about looking into my own software.

[Brian EA]

Lse

Use the lump sum election. There are a set of worksheets that you need to fill out and then enter the amt on the ss line on 1040.
If by just looking at the firures and you are convinced that 85% of the ss would be taxable in all the 3 years then put the entire amt on the ss line.Your software will figure the taxable amt.


To explain the worksheets; this is how it goes.
The SS benefits for the particular year is added to the income for that year and the Taxable Ss benefit is figured. You then add it all together and put the figure on the SS line of the current year

The way I do it is if the client has been with me for the last 3 years I go back to the previous years and plug in the ss benefit. I then add up all the taxable amt and put it on the SS line as the Lump Sum Election

It works