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IRS changed return for taxable Social Security

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    IRS changed return for taxable Social Security

    Tax return was filed utilizing the UCE exclusion. Taxable Social Security worksheet included the full amount of the unemployment benefits. IRS has changed the return on May 24 to exclude the $10,200 from the calculation of taxable Social Security benefits resulting in an additional refund for client. Does anyone have any updated information that it should be excluded from the SS Benefits worksheet? I can find nothing.

    #2
    Originally posted by Janey View Post
    Tax return was filed utilizing the UCE exclusion. Taxable Social Security worksheet included the full amount of the unemployment benefits. IRS has changed the return on May 24 to exclude the $10,200 from the calculation of taxable Social Security benefits resulting in an additional refund for client. Does anyone have any updated information that it should be excluded from the SS Benefits worksheet? I can find nothing.
    Are you sure that's what happened?

    As I understand your post - If the UI is reduced, won't the Modified Adjusted Gross Income be reduced - possibly leading to a lesser amount of taxable Social Security benefits?

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      #3
      The instruction for figuring taxable Social Security MAGI includes the $10.200 it is not excluded for figuring taxable Social Security. IRS excluded it and recalculated taxable Social Security.

      "Caution. When figuring any of the following deductions or exclusions, include the full amount of your unemployment benefits reported on Schedule 1, line 7 (unreduced by any exclusion amount): taxable social security benefits, IRA deduction, student loan interest deduction, nontaxable amount of Olympic or Paralympic medals and USOC prize money, the exclusion of interest from Series EE and I U.S. Savings Bonds issued after 1989, the exclusion of employer-provided adoption benefits, the tuition and fees deduction, and the deduction of up to $25,000 for active participation in a passive rental real estate activity. See the specific form or instructions for more information. If you file Form 1040-NR, you aren’t eligible for all of these deductions"

      I can not find that this instruction has been updated to exclude the UCE and I think IRS errored in sending my client additional refund.

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        #4
        I'm doing an amended 1040 for unclaimed UI income and my program keeps the $10,200 in MAGI. In my case more SS is being shown in income. It has always been that way from the start of the ruling. We had to wait at least a month for IRS and tax programs to update their programs to account for ALL MAGI adjustments.
        Last edited by BOB W; 06-08-2021, 02:09 PM.
        This post is for discussion purposes only and should be verified with other sources before actual use.

        Many times I post additional info on the post, Click on "message board" for updated content.

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          #5
          I have seen other posts on other forums about this same thing. I'm wondering if the IRS has some more glitches going on.

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            #6
            Ok Thanks that’s what I thought. I talked to my software company also and they say it is correct as filed. Though I was missing a new change.

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              #7
              Are you advising the client to return the refund check?? I have identical situation.

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                #8
                I have similar situation too. I even did a manual calculations and mine and Drake software calculations were identical. I think this is IRS error of some sought. I have suggested my client to save the refund money as IRS might ask for repayment.

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