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Barbara
Barbara, Tax Preparer
Category: Tax
Satisfied Customers: 934
Experience:  Tax Preparer for 16 years; 25+ years experience as a real estate/corporate paralegal.
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This Questions is for Megan C: Hi Megan, I have a question

Customer Question

This Questions is for Megan C: Hi Megan, I have a question and want to know if you agree with me. The question is "The Social Security lump-sum election means the client elects to do which of the following:

Treat the lump-sum social security benefit as if the benefits for prior years had been received in those years by amending the prior-year returns or as if benefits had been evenly allocated among he reported years, or as if benefits for prior years had been received in those years, or as if the benefits for prior years received in the current year.

Thanks.
Submitted: 9 months ago.
Category: Tax
Expert:  Lindie-mod replied 9 months ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I sent your requested professional a message to follow up with you here, when they are back online.

If I can help further, please let me know. Thank you for your continued patience.

Best,

Lindie

Customer: replied 9 months ago.

Thank you.

Expert:  Barbara replied 9 months ago.

Welcome. My name is Barbara. The expert you requested is currently offline, and I will attempt to assist you to give you a prompt answer to your question.

 

Per IRS Publication 915, a lump-sum benefit payment should not be confused with the lump-sum death benefit that both the SSA and RRB pay to many of their beneficiaries. No part of the lump-sum death benefit is subject to tax.


In the case of a lump-sum benefit payment that is not a lump-sum death benefit, you would use the current tax year income to figure the taxable part of the total benefits received in that year. However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. You can elect this method if it lowers your taxable benefits. Under the lump-sum election method, you refigure the taxable part of all of you benefits for the earlier year (including the lump-sum payment) using that year's income. Then you subtract any taxable benefits for that year that you previously reported. The remainder is the taxable part of the lump-sum payment. Add it to the taxable part of your benefits for the current year (figured without the lump-sum payment for the earlier year).

 

You would not make any adjustments to an earlier year's return and would not file an amended return for the earlier year.

 

Worksheets will need to be completed to determine the taxable part of the lump-sum payment.

 

Publication 915 which includes further information as well as the worksheets and examples can be found at the following link:

 

http://www.irs.gov/publications/p915/ar02.html#en_US_2012_publink100097893

 

After your review of this information, please come back to me here if you have any follow-up questions, and I will be happy to assist you.

 

Thank you and best regards,

Barb

Barbara, Tax Preparer
Category: Tax
Satisfied Customers: 934
Experience: Tax Preparer for 16 years; 25+ years experience as a real estate/corporate paralegal.
Barbara and 5 other Tax Specialists are ready to help you
Customer: replied 9 months ago.

I was using the wrong PUB and could not find exactly what I was looking for.


 


Thank you very, very much.

Expert:  Barbara replied 9 months ago.

It's been my pleasure.

 

Please take a moment to rate my answer to you since that is an important part of being an expert on JustAnswer, and I strive for excellence.

 

If you have any questions in the future, please feel free to put "for bkb1956 or Barb" in the subject line, and I will be happy to assist you.

 

Thank you and best regards,

Barb

Expert:  Barbara replied 9 months ago.

Just a short note to thank you for the "excellent" rating and very generous bonus. Both are most appreciated.

 

Best regards,

Barb

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