Question

2022

Box 1. Name: TANIA BATES
Box 2. Beneficiary's Social Security Number
Box 3. Benefits Paid in 2022: XXX-XX-XXXX
31,200.00
DESCRIPTION OF AMOUNT IN BOX 3:
2,041.20 received.
Box 6. Voluntary Federal Income Tax Withholding: $0.00
Box 7. Address: 1735 OZARK TRAIL, YOUR CITY, YS XXXXX
Box 8. Claim Number (Use this number if you need to contact SSA): XXX-XX-XXXXA

DO NOT RETURN THIS FORM TO SSA OR IRS

Tania, a single taxpayer, had to repay social security benefits that she received and included in her income in a prior year. In 2022, she repaid more than she received in benefits. In early 2023, she received the following Form SSA-1099, reporting information about the amount of benefits paid as well as the amount of benefits repaid during the year. Assuming general rules and circumstances, choose the statement that describes how Tania may report this repayment on her 2022 return:

A. She may deduct the excess repayment amount shown in Box 5 on Schedule A, other itemized deductions, as a repayment of amounts under a claim of right. Alternatively, she may use the amount to figure a refundable credit.
B. She may use the repayment amount shown in Box 4 to figure a refundable tax credit.
C. She may deduct the repayment amount shown in Box 4 in the section for "other itemized deductions" on Schedule A, including that this is a deduction for repayment of amounts under a claim of right.
D. She will not be able to deduct the repayment on her tax return.

Answer 1

Tania must use Schedule A to deduct her repayment of Social Security benefits, as it is an itemized deduction, specifically as a repayment under a claim of right.

Step-by-step explanation:

The student is asking about how to report a repayment of Social Security benefits on a tax return when the repayment exceeds the benefits received. According to IRS guidelines, if you have repaid Social Security benefits in a year and the repayment is more than the benefits you received that year, there is a specific way to handle this on your tax return. Based on the choices given, the appropriate one is:

C. She may deduct the repayment amount shown in Box 4 in the section for "other itemized deductions" on Schedule A, including that this is a deduction for repayment of amounts under a claim of right.

Tania should use Schedule A of her tax return to calculate the deductions for her repayments, as it is considered an itemized deduction. The keyword "claim of right" could indicate special treatment under tax law for the amounts repaid.