Page 69 - 2020 Publication 17

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Page 67 of 138
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Filled-in Worksheet 1. Note. If you are married filing separately you repaid (box 4) are more than the gross ben-
Figuring Your Taxable Benefits and you lived with your spouse at any efits (box 3) you received. If this occurred, your
time in 2020, skip lines 9 through 16, net benefits in box 5 will be a negative figure (a
Before you begin: multiply line 8 by 85% (0.85), and enter figure in parentheses) and none of your benefits
• If you are married filing separately and you lived the result on line 17. Then go to line 18. will be taxable. Don’t use a worksheet in this
apart from your spouse for all of 2020, enter “D” 10. Is the amount on line 9 less than the case. If you receive more than one form, a neg-
to the right of the word “benefits” on Form 1040 amount on line 8? ative figure in box 5 of one form is used to offset
or 1040-SR, line 6a. a positive figure in box 5 of another form for that
• Don’t use this worksheet if you repaid benefits No. STOP None of your benefits are same year.
in 2020 and your total repayments (box 4 of taxable. Enter -0- on Form 1040 or If you have any questions about this nega-
Forms SSA-1099 and RRB-1099) were more 1040-SR, line 6b. If you are married tive figure, contact your local SSA office or your
than your gross benefits for 2020 (box 3 of filing separately and you lived apart local RRB field office.
Forms SSA-1099 and RRB-1099). None of your from your spouse for all of 2020, be sure
benefits are taxable for 2020. For more you entered “D” to the right of the word Joint return. If you and your spouse file a joint
information, see Repayments More Than Gross “benefits” on Form 1040 or 1040-SR, return, and your Form SSA-1099 or RRB-1099
Benefits, later. line 6a. has a negative figure in box 5, but your spou-
• If you are filing Form 8815, Exclusion of Interest Yes. Subtract line 9 from line 8 . . . . 13,500 se's doesn’t, subtract the amount in box 5 of
From Series EE and I U.S. Savings Bonds 11. Enter $12,000 if married filing jointly; or your form from the amount in box 5 of your
Issued After 1989, don’t include the amount $9,000 if single, head of household, spouse's form. You do this to get your net bene-
from line 2b of Form 1040 or 1040-SR on line 3 qualifying widow(er), or married filing fits when figuring if your combined benefits are
of this worksheet. Instead, include the amount separately and you lived apart from taxable.
from Schedule B (Form 1040), line 2. your spouse for all of 2020 . . . . . . . . 12,000
1. Enter the total amount from 12. Subtract line 11 from line 10. If zero or Example. John and Mary file a joint return
box 5 of ALL your Forms less, enter -0- . . . . . . . . . . . . . . . 1,500 for 2020. John received Form SSA-1099 show-
SSA-1099 and RRB-1099. Also 13. Enter the smaller of line 10 ing $3,000 in box 5. Mary also received Form
enter this amount on Form 1040 or line 11 . . . . . . . . . . . . . . . . . 12,000 SSA-1099 and the amount in box 5 was ($500).
or 1040-SR, line 6a . . . . . . . $10,000 14. Multiply line 13 by 50% (0.50) . . . . . . 6,000 John and Mary will use $2,500 ($3,000 minus
2. Multiply line 1 by 50% (0.50) . . . . . . . 5,000 15. Enter the smaller of line 2 or line 14 . . 5,000 $500) as the amount of their net benefits when
3. Combine the amounts from Form 1040 16. Multiply line 12 by 85% (0.85). If line 12 figuring if any of their combined benefits are
or 1040-SR, lines 1, 2b, 3b, 4b, 5b, 7; is zero, enter -0- . . . . . . . . . . . . . 1,275 taxable.
and Schedule 1 (Form 1040), line 9 . . . 40,500 17. Add lines 15 and 16 . . . . . . . . . . . 6,275
4. Enter the amount, if any, from Form 18. Multiply line 1 by 85% (0.85) . . . . . . . 8,500 Repayment of benefits received in an ear-
1040 or 1040-SR, line 2a . . . . . . . . -0- 19. Taxable benefits. Enter the smaller of lier year. If the total amount shown in box 5 of
5. Enter the total of any exclusions/ line 17 or line 18. Also enter this amount $6,275 all of your Forms SSA-1099 and RRB-1099 is a
negative figure, you may be able to deduct part
adjustments for: on Form 1040 or 1040-SR, line 6b . . . of this negative figure that represents benefits
• Adoption benefits (Form 8839, More than 50% of Joe's net benefits are tax- you included in gross income in an earlier year
line 28),
• Foreign earned income or housing able because the income on line 8 of the work- if the figure is more than $3,000. If the figure is
(Form 2555, lines 45 and 50), and sheet ($45,500) is more than $44,000. (See $3,000 or less, it is a miscellaneous itemized
• Certain income of bona fide Maximum taxable part under How Much Is Tax- deduction and can no longer be deducted.
residents of American Samoa able, earlier.) Joe and Betty enter $10,000 on Deduction more than $3,000. If this de-
(Form 4563, line 15) or Puerto Form 1040, line 6a; and $6,275 on Form 1040, duction is more than $3,000, you should figure
Rico . . . . . . . . . . . . . . . . -0- line 6b. your tax two ways.
6. Combine lines 2, 3, 4, and 5 . . . . . . . 45,500 Deductions Related to 1. Figure your tax for 2020 with the itemized
7. Enter the total of the amounts from deduction included on Schedule A (Form
Form 1040 or 1040-SR, line 10b, Your Benefits 1040), line 16.
Schedule 1 (Form 1040), lines 10
through 19, plus any write-in You may be entitled to deduct certain amounts 2. Figure your tax for 2020 in the following
adjustments you entered on the dotted related to the benefits you receive. steps.
line next to Schedule 1 (Form 1040), a. Figure the tax without the itemized de-
line 22 . . . . . . . . . . . . . . . . . . . -0- Disability payments. You may have received
8. Is the amount on line 7 less than the disability payments from your employer or an in- duction included on Schedule A
amount on line 6? surance company that you included as income (Form 1040), line 16.
on your tax return in an earlier year. If you re- b. For each year after 1983 for which
No. STOP None of your social security ceived a lump-sum payment from the SSA or part of the negative figure represents
benefits are taxable. Enter -0- on Form RRB, and you had to repay the employer or in- a repayment of benefits, refigure your
1040 or 1040-SR, line 6b. surance company for the disability payments, taxable benefits as if your total bene-
Yes. Subtract line 7 from line 6 . . . . 45,500 you can take an itemized deduction for the part fits for the year were reduced by that
9. If you are: of the payments you included in gross income part of the negative figure. Then refig-
• Married filing jointly, enter $32,000
• Single, head of household, in the earlier year. If the amount you repay is ure the tax for that year.
more than $3,000, you may be able to claim a
qualifying widow(er), or married c. Subtract the total of the refigured tax
filing separately and you lived tax credit instead. Claim the deduction or credit amounts in (b) from the total of your
apart from your spouse for all of in the same way explained under Repayment of actual tax amounts.
2020, enter $25,000 . . . . . . . . 32,000 benefits received in an earlier year in the sec-
tion Repayments More Than Gross Benefits d. Subtract the result in (c) from the re-
next. sult in (a).
Compare the tax figured in methods 1 and 2.
Repayments More Than Your tax for 2020 is the smaller of the two
Gross Benefits amounts. If method 1 results in less tax, take
the itemized deduction on Schedule A (Form
In some situations, your Form SSA-1099 or 1040), line 16. If method 2 results in less tax,
Form RRB-1099 will show that the total benefits claim a credit for the amount from step 2c
above on Schedule 3 (Form 1040), line 12d.
Enter “I.R.C. 1341” on the entry line. If both
Chapter 7 Social Security and Equivalent Railroad Retirement Benefits Page 65