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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Social Security
Satisfied Customers: 19111
Experience:  B.A.; M.B.A.; J.D.
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I received a lump sum social security disability payment

Customer Question

I received a lump sum social security disability payment this year for a total of about 2 1/2 years of back pay. How do I separate the the years so I don't have to claim it all this year? I am using turbo tax. thanks.
Submitted: 1 year ago.
Category: Social Security
Expert:  dylatess replied 1 year ago.
The back benefits award must be reported for the year that it is received and not for the back months that it relates to . The only exception is if you file an amended return for last year and report the income that was not reported on your last return. Likewise, SSD benefits are not taxable unless you have other income as follows: If single, and you total income is over25K or if married and your total income is over $35K
Customer: replied 1 year ago.
I have rental income which the gross, I believe, is over $25k, but the net is definitely not. Does that rule you mentioned still apply?
Expert:  dylatess replied 1 year ago.
Yes it does as the IRS looks at gross income before deductions. So it would put you over the 25K
Customer: replied 1 year ago.
If I am right on the line of the 25,000 comma can you recommend anything that I can do to take some deductions to put me under that amount?
Expert:  Phillips Esq. replied 1 year ago.
A different professional here. IRS Publication 915 has worksheets you can use to figure out how to report the lump sum. It has different methods you can use to reduce your tax liability. Click on the link below for Publication 915. Also, see Publication 501.