Question from Terri
February 14, 2011 at 8:52pm
I was on SSDI and was overpaid. I now accomplish a acquittal every ages to the feds. Can I affirmation this acquittal as a tax deduction?
They beatific me a 1099 acquainted such.
Answer: Terri – The blazon of affirmation you accredit to can be taken as a tax answer on your federal assets tax return, but alone if you catalog your deductions application Schedule A for Form 1040.
The address in which you booty the answer can depend on the bulk of the repayment.
IRS Publication 529, Assorted Deductions gives some advice on this:
If the absolute of the amounts in box 5 (net allowances for 2010) of all your Forms SSA-1099, Social Security Benefit Statement, and Forms RRB-1099, Payments By the Railroad Retirement Board, is a abrogating bulk (a bulk in parentheses), you may be able to booty a assorted itemized answer accountable to the 2% limit. The bulk you can abstract is the allotment of the abrogating bulk that represents an bulk you included in gross assets in an beforehand year.
The bulk in box 5 of Form SSA-1099 or RRB-1099 is the net bulk of your allowances for the year. It will be a abrogating bulk if the bulk of allowances you repaid in 2010 (box 4) is added than the gross bulk of allowances paid to you in 2010 (box 3).
If the answer is added than $3,000, you will accept to use a appropriate ciphering to bulk your tax. See Publication 915, Social Security and Equivalent Railroad Retirement Benefits, for added information.
Publication 915 includes the following:
Figure your tax for 2010 with the itemized answer included on Schedule A, band 28.
Figure your tax for 2010 in the afterward steps:
Figure the tax afterwards the itemized answer included on Schedule A, band 28.
For anniversary year afterwards 1983 for which allotment of the abrogating bulk represents a affirmation of benefits, refigure your taxable allowances as if your absolute allowances for the year were bargain by that allotment of the abrogating figure. Then refigure the tax for that year.
Subtract the absolute of the refigured tax amounts in (b) from the absolute of your absolute tax amounts.
Subtract the aftereffect in (c) from the aftereffect in (a).
Compare the tax ample in methods (1) and (2). Your tax for 2010 is the abate of the two amounts. If adjustment (1) after-effects in beneath tax, booty the itemized answer on Schedule A (Form 1040), band 28. If adjustment (2) after-effects in beneath tax, affirmation a acclaim for the bulk from footfall 2(c) aloft on Form 1040, band 71, and address “I.R.C. 1341” in the allowance to the larboard of band 71. If both methods aftermath the aforementioned tax, abstract the affirmation on Schedule A (Form 1040), band 28.
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