Social Security and taxes question

Parent Cafe
1

Ok…so, in 2015, I earned too much money. So I had to pay SS back the money owed them. They sent me a bill for this in 2016 which I fully paid. My SS benefit I was $170 a month…so I had to back the full,amount…$2010.

Anyway…yesterday I got my SS statement for taxes. There is nothing on this noting that I paid them BACK $2010 in 2016.

My questions:

  1. Should I be paying 2016 taxes on the full amount when I actually gave it BACK to them?
  2. Or how about thinking of it this way...I paid it back to them with money I already PAID taxes on. Do I get to now pay them again.

I guess what I’m saying…

I paid taxes on the SS earnings in 2015. I refunded them their whole amount…every penny…on 2016. The $2010 I used to pay it, already was taxed in some year (I know…that probably doesn’t matter).

Shouldn’t the amount I paid them BACK be deducted from my SS earnings for 2016? Why would I have to pay taxes on those earning again…when they were fully refunded to the SS administration.

2

https://www.ssa.gov/planners/taxes.html

Thumper, I don’t know the answer but was curious. Found this page at SS with another link at the bottom.

Hopefully someone in the know will chime in.

3

When did you pay back $2010 to SSA? My guess would be it probably did not record it yet. If you paid them back fully, I think you can assume you never got anything for tax purposes.

4

I paid them IN FULL and even have a letter from SS saying they have my payment and rhe balance owed back to them is zero.

This happened in October. And the letter from them is dated…October 2016.

5

But you paid them back in 2016 but it was for 2015. And you are not fully taxed on social security, only at most 85% of it. There are methods to calculate this. I suggest the link sax put here.

6

I have to pay on 85%. I know that much.

I don’t see anything on that link about what happens if you pay back SS any amount.

7

If you paid it in October, there’s a good chance they didn’t record it yet. They may not record it when they sent you a letter that they received your payment. I think you can proceed as if you received no payment from SSA. Since it’s 2015 payment that you paid back, I would think you file 1050X for 2015 canceling SS payment. For 2016, if you received SS, it could be taxed for year 2016.

8

@thumper1 : I had the same experience when I filed and suspended, and SS decided to drop a not-inconsiderable sum in my account. I returned it, by making an appointment at my local office, but I later got a 1099 reflecting their payment to me but not my payment back. I contacted my senator (who happens to also be your senator) and they were able to help me get a corrected 1099.

9

Thanks VH.