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Jon Andrews
Jon Andrews, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 3118
Experience:  I deal with all levels of tax planning and controversy - from the ordinary to the complex.
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Social Security

Customer Question

My husband received social security diasbility payment for 2002 and 2003. What part of this benefit is taxable?
Submitted: 11 years ago.
Category: Tax
Expert:  Jon Andrews replied 11 years ago.

I have sent you a worksheet privately to help you try to figure this out. if you have difficulty with or need further assistance, please let me know.


[email protected] 
Expert:  Jon Andrews replied 11 years ago.

Following are the worksheets that you need to complete. They are worksheets 1, 2, and 4. Worksheet 3 does not apply to your situation. I apologize for the format, but is the best I can do in the present circumstances.


WORKSHEET 1. FIGURING YOUR TAXABLE BENEFITS
 
   Keep for your records
 
BEFORE YOU BEGIN: Is your filing status MARRIED FILING SEPARATELY?
 
   NO.   Go to line 1 below.
 
   YES.  Did you live apart from your spouse all year?
 
         NO.   Go to line 1 below.
 
         YES.  DO THE FOLLOWING IF YOU FILE:
 
               FORM 1040: Enter "D" to the right of the word "benefits"
               on line 20a, then go to line 1 below.
 
               FORM 1040A: Enter "D" to the right of the word "benefits"
               on line 14a, then go to line 1 below.
 
  1. Enter the total amount from box 5 of ALL your
     Forms SSA–1099 and RRB–1099                  &nbs p;            1. ____
 
     NOTE: If line 1 is zero or less, stop here; none
     of your benefits are taxable. Otherwise, go on to
     line 2.
 
  2. Enter one-half of line 1                     ;              2. ____
 
  3. Enter the total of the amounts from:
 
     FORM 1040 Lines 7, 8a, 8b, 9a, 10-14, 15b,
     16b, 17-19, and 21
 
     FORM 1040A: Lines 7, 8a, 8b, 9a, 10, 11b, 12b, and 13     3. ____
 
  4. FORM 1040 FILERS: Enter the total of any exclusions/
     adjustments for:
 
     * Qualified U.S. savings bond interest (Form 8815,
     line 14)
 
     * Adoption benefits (Form 8839, line 30)
 
     * Foreign earned income or housing (Form 2555, lines
     43 and 48, or Form 2555–EZ, line 18), and
 
     * Certain income of bona fide residents of American
     Samoa (Form 4563, line 15) or Puerto Rico
 
     FORM 1040A FILERS: Enter the total of any exclusions for:
 
     * Qualified U.S. savings bond interest (Form 8815,
       line 14)
 
     * Adoption benefits (Form 8839, line 30)                  4. ____
 
  5. Add lines 2, 3, and 4                     ;                 5. ____
 
  6. FORM 1040 FILERS: Enter the amount from Form
     1040, line 35, minus any amounts on Form 1040, lines
     26 and 27
 
     FORM 1040A FILERS: Enter the amount from Form 1040A,
     line 20, minus any amounts on Form 1040A, lines 18
     and 19.                   &nb sp;                   &nb sp;           6. ____
 
  7. Is the amount on line 6 less than the amount on
     line 5?
 
        NO.  STOP  None of your social security benefits
                   are taxable.
 
       YES.  Subtract line 6 from line 5                     ;   7. ____
 
  8. If you are:
 
       * Married filing jointly, Enter $32,000
 
       * Single, head of household, qualifying widow(er),
         or married filing separately and you LIVED APART
         from your spouse for all of 2004, enter $25,000       8. ____
 
     NOTE: If you are married filing separately and you
     lived with your spouse at any time in 2004, skip
     lines 8 through 15; multiply line 7 by 85% (.85)
     and enter the result on line 16. Then go to line 17.
 
  9. Is the amount on line 8 less than the amount on line 7?
 
        NO.  STOP  None of your benefits are taxable. Do
                   not enter any amounts on Form 1040,
                   line 20a or 20b, or on Form 1040A,
                   line 14a or 14b. But if you are married
                   filing separately and you lived apart
                   from your spouse for all of 2004, enter
                   -0- on Form 1040, line 20b, or on Form
                   1040A, line 14b.
       YES.  Subtract line 8 from line 7                     ;   9. ____
 
 10. Enter $12,000 if married filing jointly; $9,000 if
     single, head of household, qualifying widow(er), or
     married filing separately and you LIVED APART from
     your spouse for all of 2004                   &n bsp;          10. ____
 
 11. Subtract line 10 from line 9. If zero or less,
     enter -0-                   &nb sp;                   &nb sp;        11. ____
 
 12. Enter the SMALLER of line 9 or line 10                   12. ____
 
 13. Enter one-half of line 12                   &nbs p;            13. ____
 
 14. Enter the SMALLER of line 2 or line 13                   14. ____
 
 15. Multiply line 11 by 85% (.85). If line 11 is zero,
     enter -0-                   &nb sp;                   &nb sp;        15. ____
 
 16. Add lines 14 and 1 5                     ;                  16. ____
 
 17. Multiply line 1 by 85% (.85)                   & nbsp;         17. ____
 
 18. TAXABLE BENEFITS. Enter the SMALLER of line 16 or
     line 1 7                     ;                              18. ====
 
     * Enter the amount from line 1 above on Form 1040,
       line 20a, or on Form 1040A, line 14a.
 
     * Enter the amount from line 18 above on Form 1040,
       line 20b, or on Form 1040A, line 14b.
 
     NOTE: If you received a lump-sum payment in this year that was for
     an earlier year, also complete Worksheet 2 or 3 and Worksheet 4 to
     see whether you can report a lower taxable benefit.
 
 
   WORKSHEET 2. FIGURE YOUR ADDITIONAL TAXABLE BENEFITS (FROM A LUMP-SUM PAYMENT FOR A YEAR AFTER 1993)
 
   ENTER EARLIER YEAR ____
 
   Keep for your records
 
  1. Enter the total amount from box 5 of ALL your
     Forms SSA–1099 and RRB–1099 for the earlier year,
     plus the lump-sum payment for the earlier year
     received after that year                   &n bsp;            1. ____
 
     NOTE: If line 1 is zero or less, skip lines 2
     through 20 and enter -0- on line 21. Otherwise,
     go on to line 2.
 
  2. Enter one-half of line 1                     ;            2. ____
 
  3. Enter the adjusted gross income reported on your
     return for the earlier year                   &n bsp;         3. ____
 
  4. Enter the total of any exclusions/adjustments you
     claimed in the earlier year for:
 
     * Adoption benefits (Form 8839)
 
     * Qualified U.S. savings bond interest (Form 8815)
 
     * Student loan interest (Form 1040, page 1, or Form
       1040A, page 1)
 
     * Tuition and fees (Form 1040, page 1, or Form
       1040A, page 1)
 
     * Foreign earned income or housing (Form 2555 or
     Form 2555–EZ)
 
     * Certain income of bona fide residents of American
     Samoa (Form 4563) or Puerto Rico                   &n bsp;    4. ____
 
  5. Enter any tax-exempt interest received in the
     earlier year                   &n bsp;                         5. ____
 
  6. Add lines 2, 3, 4, and 5                     ;            6. ____
 
  7. Enter taxable benefits reported on your return
     for the earlier year                   &n bsp;                 7. ____
 
  8. Subtract line 7 from line 6                     ;         8. ____
 
  9. If for the earlier year you were:
 
     * Married filing jointly, enter $32,000
 
     * Single, head of household, qualifying widow(er),
       married filing separately and lived apart from your
       spouse for all of the earlier year, enter $25,000
 
     * Married filing separately and lived with your
       spouse at any time during the earlier year
       enter -0-                   &nb sp;                   &nb sp;     9.  ___
 
 
 10. Subtract line 9 from line 8. If zero or less,
     enter -0-                   &nb sp;                   &nb sp;      10. ____
 
     NOTE: If line 10 is zero or less, skip lines 11
     through 20 and enter -0- on line 21. Otherwise,
     go on to line 11.
 
 11. Enter $9,000 ($12,000 if married filing jointly
     for the earlier year; $0 if married filing
     separately for the earlier year and you lived
     with your spouse at any time during the year)          11. ____
 
 12. Subtract line 11 from line 10. If zero or less,
     enter -0-                   &nb sp;                   &nb sp;      12. ____
 
 13. Enter the SMALLER of line 10 or line 11                13. ____
 
 14. Enter one-half of line 13                   &nbs p;          14. ____
 
 15. Enter the SMALLER of line 2 or line 14                 15. ____
 
 16. Multiply line 12 by 85% (.85). If line 12 is
     zero, enter -0-                   &nb sp;                    16. ____
 
 17. Add lines 15 and 1 6                     ;                17. ____
 
 18. Multiply line 1 by 85% (.85)                   & nbsp;       18. ____
 
 19. REFIGURED TAXABLE BENEFITS. Enter the SMALLER
     of line 17 or line 18                   &nbs p;              19. ____
 
 20. Enter taxable benefits reported on your return
     for the earlier year (or as refigured due to a
     previous lump-sum payment for the year)                20. ____
 
 21. ADDITIONAL TAXABLE BENEFITS. Subtract line 20
     from line 19. Also enter this amount on line 19
     of Worksheet 4                     ;                      21. ____
 
     NOTE: Do not file an amended return for this earlier year. Complete
     a separate Worksheet 2 or Worksheet 3 for each earlier year for
     which you received a lump-sum payment in 2004.
 
 


 
   WORKSHEET 4. FIGURE YOUR TAXABLE BENEFITS UNDER THE LUMP-SUM ELECTION METHOD (USE WITH WORKSHEET 2 OR 3)
 
   Keep for your records
 
Complete Worksheet 1 and Worksheets 2 and 3 as appropriate before
completing this worksheet.
 
  1. Enter the total amount from box 5 of ALL your
     Forms SSA–1099 and RRB–1099 for 2004, minus the
     lump-sum payment for years before 2004                  1. ____
 
     NOTE: If line 1 is zero or less, enter zero on
     lines 2 and 11 and ship lines 3 through 10.
     Otherwise, go on to line 2.
 
  2. Enter one-half of line 1                     ;            2. ____
 
  3. Enter the amount from line 3 of Worksheet 1             3. ____
 
  4. Enter the amount from line 4 of Worksheet 1             4. ____
 
  5. Add lines 2, 3, and 4                     ;               5. ____
 
  6. Enter the amount from line 6 of Worksheet 1             6. ____
 
  7. Subtract line 6 from line 5                     ;         7. ____
 
  8. Enter the amount from line 8 of Worksheet 1             8. ____
 
  9. Is line 7 more than line 8?
 
     NO. Skip lines 9-17 and enter -0- on line 18.
 
     YES. Subtract line 8 from line 7                     ;    9. ____
 
 10. Enter the amount from line 10 of Worksheet 1
     (Enter -0- if you are married filing separately
     and lived with your spouse at any time during
     2004.)                                                   10. ____
 
 11. Subtract line 10 from line 9. If zero or less,
     enter -0-                   &nb sp;                   &nb sp;      11. ____
 
 12. Enter the SMALLER of line 9 or line 10                 12. ____
 
 13. Enter one-half of line 12                   &nbs p;          13. ____
 
 14. Enter the SMALLER of line 2 or line 13                 14. ____
 
 15. Multiply line 11 by 85% (.85). If line 11 is zero,
     enter -0-                   &nb sp;                   &nb sp;      15. ____
 
 16. Add lines 14 and 1 5                     ;                16. ____
 
 17. Multiply line 1 by 85% (.85)                   & nbsp;       17. ____
 
 18. Enter the SMALLER of line 16 or line 17                18. ____
 
 19. Enter the total of the amounts from line 21 of
     Worksheet 2 and line 14 of Worksheet 3 for all
     earlier years for which the lump-sum payment
     was received                  &nbs p;                   &nbs p;    19. ____
 
 20. TAXABLE BENEFITS UNDER LUMP-SUM ELECTION METHOD.
     Add lines 18 and 19                   &nbs p;                20. ____
 
NEXT: Is line 20 above smaller than line 18 of Worksheet 1?
 
     NO. You cannot use this method to figure your taxable benefits.
     Follow the instructions on Worksheet 1 to report your benefits.
 
     Yes. You can elect to report your taxable benefits under this method.
     To elect this method:
 
     * Make the following entries on your return:
 
          On Form 1040, enter "LSE" to the left of line 20a.
 
          On Form 1040A, enter "LSE" to the left of line 14a.
 
     * Enter the amount from line 1 of Worksheet 1 on Form 1040, line 20a,
     or on Form 1040A, line 14a. If you are married filing separately and
     you lived apart from your spouse for all of 2004, also make the
     entries described at the top of Worksheet 1.
 
     * If line 20 above is zero, follow the instructions in line 9 for
     "No" on Worksheet 1. Otherwise, enter the amount from line 20 above
     on Form 1040, line 20b, or on 1040A, line 14b.  









































































































































































































































































































































Customer: replied 11 years ago.
Reply to Jon Andrews's Post: I have already paid the five dollars, but I don"t see the answer to my question.
Expert:  Jon Andrews replied 11 years ago.

I have sent an email to the administrator to see what the issue is.


One of us will be back in touch shortly.

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