Social Security and Railroad Retirement Equivalent Form 1040 – Line 22 Pub 4491 – Part 3 – Lesson 15 Pub 4012 – Page D – 25

Intake and Interview Ask for Social Security statement SSA-1099 and/or Railroad Retirement RRB-1099 if line 13 is checked either Yes or Unsure. If any lump-sum payments, does taxpayer have returns for those years? NTTC Training – TY2016

Form SSA-1099 Fabricated person Make sure to use Form SSA-1099 and not the estimate for the next year. Sometimes taxpayers mistakenly bring in that form. NTTC Training – TY2016

Social Security Income in TaxSlayer In Federal Section, select IRA/Pension Distributions (1099R-SSA-1099) from Income list. Then select SSA- 1099 * Enter data for both Taxpayer and Spouse Check for Federal withholding Add Medicare payments and enter on Medicare line, it will carry automatically to Schedule A * Can go directly to SSA-1099 input screen by using Quick Files, Taxpayer Profiles, Enter Form or 1040 View . NTTC Training – TY2016

Add SS Income To TaxSlayer Enter data as indicated for Taxpayer and Spouse. Add Medicare Parts, if shown, together and enter on line Taxpayer’s Medicare Premiums if not self-employment health care deduction which is out of scope Railroad Tier 1 benefits are SS equivalent – more later NTTC Training – TY2016

Lump-Sum Social Security Benefits paid may include lump-sum payments for prior years Prior year amounts will show in DESCRIPTION block of Form SSA-1099 All must be included in the current return Compare whether refund/tax owed changes when all entered for current year versus allocating appropriate amounts to prior year(s) Sometimes if a taxpayer files for disability, it takes a long time to work through the approval process. This can result in social security allocated to several years. An example is shown on the next chart. For multiple year social security it may be possible that there isn’t any tax impact if all of the social security is entered as lump-sum for the current year. If there is an impact it may be better to use lump sum worksheets for each year; however, the AGI, taxable social security, total social security and tax exempt interest are needed for each year. If lump sum is used, taxpayer must have tax returns available for those years. NTTC Training – TY2016 6

SSA -1099 Lump Sum Distribution 2016 Sample SSA-1099 Lump- Sum Distribution If attorney fees are included in the Description of Amount in Box 3 section, those attorney fees can be included as an itemized deduction on line 23 of the Schedule A, but only to the extend that the income is taxable. For example, if one half of the Social Security benefit is taxable than only half of the attorney fees are deductible. NTTC Training – TY2016

Start With SSA-1099 Input Screen Enter entire amount on current year input screen. Then select Begin Worksheet. Taxpayer MUST have previous year(s) return(s) NTTC Training – TY2016

Complete one worksheet for each year. Lump-Sum Worksheet Complete one worksheet for each year. Click 1 – Enter the previous year benefits were received. A separate worksheet will be required for each year. In this example worksheets would be required for 2014, and 2013 Click 2 – Enter filing status for the year indicated. Click 3 – Enter the total amount of social security received for the earlier year and reported for that year Click 4 – Enter the lump-sum payment for the earlier year received this year Click 5 – Enter the adjusted gross income reported on the tax return for the earlier year. Click 6 – Enter taxable social security, if any, reported on the tax return for the earlier year. Note: You have to have all of this information (ideally prior year returns) for the years for which payments were received NTTC Training – TY2016

Comments… Taxpayer must have copies of previous year tax return(s) Be sure to enter any SS income received by taxpayer and spouse in previous year Be sure to check previous return for any tax-exempt interest (Line 8b) [line 5 on worksheet] If allocating amounts to previous years results in a lower taxable amount, TaxSlayer will automatically use that amount Print package contains worksheets for all years NTTC Training – TY2016

Railroad Retirement Benefits Pub 4012 Pg D-25 Railroad Retirement Tier 1 Blue form RRB-1099 Same Rules as Social Security Enter data on Social Security line on SSA-1099 input screen. Enter Medicare B and D on Medicare line In TaxSlayer , there is no separate input line for Railroad Retirement Tier 1 benefits. NTTC Training – TY2016

RRB-1099 2016 21,320 -0- A316-23-1085 1 21,320 316-23-1085 JOHN CONDUCTOR 1 MAIN STREET ALBUQUERQUE, NM 87110 Click 1 – Box 5 Net Social Security Equivalent Benefit to be entered on SSA-1099 input screen. Click 2 – Box 11 – Medicare Premium total. Click 3 – Box 10 – Federal Income Tax Withheld. Click 2 – Box 10 Federal Income Tax Withheld to be entered on Worksheet 1. Click 3 – Box 11 Medicare Premium Total to be entered on Worksheet 1. 1,258.80 3,192.00 NTTC Training – TY2016

SSA-1099 Input Screen – Railroad Retirement Enter Railroad Retirement Tier 1 amount on Social Security Line Click 1 – Net Social Security Equivalent Portion of tier 1 received this year from line 5 of RRB – 1099 form. Since in TaxSlayer there is no separate line for Tier 1 Railroad Retirement benefits received by the taxpayer, you will be required to make a manual adjustment when preparing your state return. Also, remember to add any taxable Tier 2 benefits for both taxpayer and spouse when applicable when making the adjustment on the state return. The Railroad Retirement Act specifically exempts benefits paid by the Railroad Retirement Board from all state and local taxes. Click 2 – Federal Income Tax withheld from line 10 of RRB-1099 Form Click 3 – Total Medicare premiums withheld from line 11 of RRB-1099 form. NTTC Training – TY2016

Railroad Retirement Benefits Railroad Retirement Tier 2 Green form RRB-1099 – R Taxed like pension Taxation of Tier 2 Covered in Retirement income lesson NTTC Training – TY2016

Foreign Old Age Payments Canada Pension Plan, Quebec Pension Plan and Old Age Security from Canada and Germany By treaty are added to/treated like U.S. Social Security (Pub 915) Taxpayer must have converted amount into US dollars (bank statement shows) Other countries and pensions from all countries (other than above) out-of-scope NTTC Training – TY2016

If Taxpayer does not have SSA-1099 Use SSA-4926 for 2016 (statement of benefits to be paid) No cost of living adjustment for 2016, the 2015 and 2016 benefits are the same Taxpayer can set up account at https://secure.ssa.gov to get information Account at secure.ssa.gov is taxpayer responsibility. Requires taxpayer email address. Not a task for counselors. NTTC Training – TY2016

Quality Review Check that all information transferred from Form(s) SSA-1099 to SSA-1099 input screen (particularly Federal Income Tax Withheld) If benefits are shown for multiple years, determine if lump-sum worksheets are needed For Form(s) RRB-1099 (Blue) make sure all information has been transferred to SSA-1099 input screen NTTC Training – TY2016

Exit Interview May need to discuss/explain why part of the SS benefits are taxable NTTC Training – TY2016

Questions/Comments? NTTC Training – TY2016