[Social Security] calculation

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2beachcombers
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[Social Security] calculation

Post by 2beachcombers »

I am helping my 83 yr old Aunt with her investments and have run across an interesting calculation for her 2013 SS taxable amount(done by CPA).
Her SS=28295 and 1040 SS taxable amount was 16,546. I have run TT for her SS taxable amount, and find this should be ZERO?(correction $948)
Would appreciate any thoughts on what could account for the following?

dividends-----6797
CG------------4348
RMD----------1600
partnership--(101)
Net op Loss--(8753)

--sum----------3891 ( plus SS/2 = 28,295/2) = (14.148)
took out MLP NOL and partnership loss
sum----------12745 +SS taxable on 12745+(14148=948 taxable SS)== 13693 AGI

Note even with these corrections, there is still a 7K$ AGI delta :annoyed

And I have ask her to ask her CPA the same question and ask her to get cc of SS worksheet.
edit for MLP corrections to AGI
Jerry
Last edited by 2beachcombers on Wed Mar 11, 2015 2:40 pm, edited 1 time in total.
JW-Retired
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Re: SScalculation

Post by JW-Retired »

Suggest you do a quickie check with TaxCaster. https://turbotax.intuit.com/tax-tools/c ... taxcaster/

Did the CPA return show her owing any tax? I roughly ran her numbers through TaxCaster and got only $2000 taxable income and zero tax, assuming the cap gains were long term & divs were qualified.
(I ignored the "net op loss" number since I didn't know what was meant by that.)
JW
Last edited by JW-Retired on Sun Mar 08, 2015 11:08 am, edited 2 times in total.
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Re: SScalculation

Post by pshonore »

JW Nearly Retired wrote:Suggest you do a quickie check with TaxCaster. https://turbotax.intuit.com/tax-tools/c ... taxcaster/

Did the CPA return show her owing any tax? I roughly ran her numbers through TaxCaster and got only $2000 taxable income and zero tax.
(I ignored the "net op loss" number since I didn't know what was meant by that.)
JW
Probably stands for Net Operating Loss. Not sure if those go into the SS taxability calculation. Even if it does not affect it, % of SS being taxed seems very high.
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Re: SScalculation

Post by 2beachcombers »

pshonore wrote:
JW Nearly Retired wrote:Suggest you do a quickie check with TaxCaster. https://turbotax.intuit.com/tax-tools/c ... taxcaster/

Did the CPA return show her owing any tax? I roughly ran her numbers through TaxCaster and got only $2000 taxable income and zero tax.
(I ignored the "net op loss" number since I didn't know what was meant by that.)
JW
Probably stands for Net Operating Loss. Not sure if those go into the SS taxability calculation. Even if it does not affect it, % of SS being taxed seems very high.

JW---Thanks for the conformation. No taxes were due(due to her net loss and Sch A deductions). But I am now estimating her 2015 tax(I liquidated her Raymond James financial sr. abuse) and have a few more individual stocks I want to sell. She is selling house, will stop paying mgt fees and will drop to std deduction.

Return of capital is included in SS calc--1040, line 21--hers was a net operating loss(NoL)

With the NoL her CPA showed a 4000 taxable income with no tax(she also had 13k$ Sch A deduction
Last edited by 2beachcombers on Sun Mar 08, 2015 1:49 pm, edited 1 time in total.
Stonebr
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Re: SScalculation

Post by Stonebr »

If her income is low enough, she might not need to file at all. There's also an IRS worksheet for this:

http://www.irs.gov/uac/Do-I-Need-to-Fil ... -Return%3F
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Re: [Social Security] calculation

Post by ObliviousInvestor »

Yes, NOLs are properly included in the calculation of how much Social Security should be included in AGI -- as they do show up as negative income on line 21 of Form 1040.

There are no other types of income here (tax-exempt interest, for example)?
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Re: [Social Security] calculation

Post by 2beachcombers »

ObliviousInvestor wrote:Yes, NOLs are properly included in the calculation of how much Social Security should be included in AGI -- as they do show up as negative income on line 21 of Form 1040.

There are no other types of income here (tax-exempt interest, for example)?
Good point--but no Muni's or interest income.

Mike-- is there anything unique about partnerships that could be showing up in the SS worksheet(can't wait to get a copy)

jerry
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Re: [Social Security] calculation

Post by ObliviousInvestor »

2beachcombers wrote:is there anything unique about partnerships that could be showing up in the SS worksheet(can't wait to get a copy)
Not that I'm aware of. To the best of my knowledge, if (101) is the amount properly showing up on line 17 of Form 1040, that's the amount that should be pulled into the worksheet.
Mike Piper | Roth is a name, not an acronym. If you type ROTH, you're just yelling about retirement accounts.
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Re: [Social Security] calculation

Post by 2beachcombers »

ObliviousInvestor wrote:
2beachcombers wrote:is there anything unique about partnerships that could be showing up in the SS worksheet(can't wait to get a copy)
Not that I'm aware of. To the best of my knowledge, if (101) is the amount properly showing up on line 17 of Form 1040, that's the amount that should be pulled into the worksheet.
Line 17--again you are correct.
I called my aunt and she had no idea what the NOL was for???
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Re: [Social Security] calculation

Post by ObliviousInvestor »

2beachcombers wrote:
ObliviousInvestor wrote:
2beachcombers wrote:is there anything unique about partnerships that could be showing up in the SS worksheet(can't wait to get a copy)
Not that I'm aware of. To the best of my knowledge, if (101) is the amount properly showing up on line 17 of Form 1040, that's the amount that should be pulled into the worksheet.
Line 17--again you are correct.
I called my aunt and she had no idea what the NOL was for???
Perhaps the partnership loss in a prior year was much larger, resulting in an NOL carryforward?
Mike Piper | Roth is a name, not an acronym. If you type ROTH, you're just yelling about retirement accounts.
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Re: [Social Security] calculation

Post by 2beachcombers »

ObliviousInvestor wrote:
2beachcombers wrote:
ObliviousInvestor wrote:
2beachcombers wrote:is there anything unique about partnerships that could be showing up in the SS worksheet(can't wait to get a copy)
Not that I'm aware of. To the best of my knowledge, if (101) is the amount properly showing up on line 17 of Form 1040, that's the amount that should be pulled into the worksheet.
Line 17--again you are correct.
I called my aunt and she had no idea what the NOL was for???
Perhaps the partnership loss in a prior year was much larger, resulting in an NOL carryforward?

Thanks, will check it out
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Re: [Social Security] calculation

Post by 2beachcombers »

EDIT____________________________This was copied from a PM by BruceM
Re: SS calculations
Sent: Wed Mar 11, 2015 2:13 pm
From: BruceM
To: 2beachcombers

Jerry
Here is my calc based on the info you've provided. A couple of points of clarification first.....

The ROC she received from the MLP is not included as negative income. Also, the calculations you show on your post of -$100 (for the year) and the collective -$8,753 for the MLP is a passive loss and cannot be used against ordinary income for the year. MLP passive losses can only be used against the same MLP's future gains (if any), will accumulate over the years the MLP is held and then will be used against net gains when the MLP units are sold. Also, $28,295/12 = $2,358/mo. Are you sure this is correct, as its near the max monthly benefit SS can pay.

The AGI from the numbers you've provided is $12,745. 1/2 of the $28,295 SS benefit she received for the year is $14,148. Assuming no muni bond interest and no other above-the-line deductions on the from of form 1040 (unusual for 80 year olds), her MAGI for purposes of SS taxation = $26,893. For singles, the amount of SS that must be included as ordinary income when the MAGI is between $25,000 and $32,000 will be the lesser of 1/2 of SS or 1/2 of the MAGI that exceeds $25,000. For her, this would be $1,893/2 = $946.

So her AGI should then be $12,745 + 946 = $13,691

Does this make sense?
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Re: [Social Security] calculation

Post by 2beachcombers »

Original copy edited after BruceM PM

Re: SS calculations
Sent: Wed Mar 11, 2015 3:24 pm
From: 2beachcombers
To: BruceM

[quote="BruceM"]Jerry
Here is my calc based on the info you've provided. A couple of points of clarification first.....

The ROC she received from the MLP is not included as negative income. Also, the calculations you show on your post of -$100 (for the year) and the collective -$8,753 for the MLP is a passive loss and cannot be used against ordinary income for the year. MLP passive losses can only be used against the same MLP's future gains (if any), will accumulate over the years the MLP is held and then will be used against net gains when the MLP units are sold. Also, $28,295/12 = $2,358/mo. Are you sure this is correct, as its near the max monthly benefit SS can pay.
Still trying to understand if SXL is a LP or MLP, Here is a copy from their web site (Sunoco Logistics Partners L.P. (NYSE: SXL) is a master limited partnership). And yes, I understand your comments wrt the MLP and passive losses
28295 is correct; her ex-husband worked to 72 with 5 figure income.


The AGI from the numbers you've provided is $12,745. 1/2 of the $28,295 SS benefit she received for the year is $14,148. Assuming no muni bond interest and no other above-the-line deductions on the from of form 1040 (unusual for 80 year olds), her MAGI for purposes of SS taxation = $26,893. For singles, the amount of SS that must be included as ordinary income when the MAGI is between $25,000 and $32,000 will be the lesser of 1/2 of SS or 1/2 of the MAGI that exceeds $25,000. For her, this would be $1,893/2 = $946.


So her AGI should then be $12,745 + 946 = $13,691
Does this make sense?[/quote
Makes perfect sense and when I redid her taxes(taking out the 2 negatives from SXL) found almost exactly your same AGI and SS numbers.

Thanks for clarifying several points
And if OK with you, I would like to post this to my thread as it will possibly help others :D
jerry

]
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