Backpay and Income Tax
 

I am married with 3 children. My husband makes less than $25k and I have no other income besides my SSDI.

I am trying to do my taxes (1040 -married filing jointly) on Turbo Tax online and can not find where to list my children back pay.

Also I could not find where to put that some of my backpay was paid back to my LTD provider.

Anyone in my situation?

Thanks

your childrens backpay gets credited to them not you. for each child if half their backpay plus their other income is less than $25,000 then no portion of that childs backpay is taxable.

you can also spread out your backpay over the years it applies to if it results in your paying a lower tax.

http://www.irs.gov/publications/p915...blink100097893

Okay my children ages are 13, 10 and 4 so I disregard their 1099 tax form for their ssdi benefits?
Therefore I do not file a return or include their SSDI benefits what so ever?

if that is their only income and its under 25,000 each, then no you dont have to file.

So if my income $536 (IRA withdrawal) for the year of 2010
and my ssdi benefits amount is $31 do I need to file a income tax return if I choose to file a separate return from my husband?

im not sure about IRA withdrawal. i never had one.

echoes is it considered income? I had a friend who was on disability all his life and when he was 18 he tried to buy a car and they said they could not consider SS disability as income.

Here is a link COLBEYMOORE, let me see if I can find out about IRA.

http://www.socialsecurity.gov/planners/taxes.htm

it is reported as income on irs form 1040 on line 20a and then you put the taxable amount on line 20b after completing the worksheet.

if half of your social security payment amount plus the rest of your income is over 25,000 for single or 32,000 for married then 50% of your social security payment is taxable. if half of your social security payments plus the rest of your income is over 34,000 for single and 44,000 for married filing jointly then 85% of your social security benefit is taxable.

This section of irs publication 915 applies to repayment to LTD

Deductions Related to Your Benefits
You may be entitled to deduct certain amounts related to the benefits you receive.

Disability payments. You may have received disability payments from your employer or an insurance company that you included as income on your tax return in an earlier year. If you received a lump-sum payment from SSA or RRB, and you had to repay the employer or insurance company for the disability payments, you can take an itemized deduction for the part of the payments you included in gross income in the earlier year. If the amount you repay is more than $3,000, you may be able to claim a tax credit instead. Claim the deduction or credit in the same way explained under Repayment of benefits received in an earlier year in the section Repayments More Than Gross Benefits , later.

Legal expenses. You can usually deduct legal expenses that you pay or incur to produce or collect taxable income or in connection with the determination, collection, or refund of any tax.

Legal expenses for collecting the taxable part of your benefits are deductible as a miscellaneous itemized deduction on Schedule A (Form 1040), line 23.

Repayments More Than Gross Benefits
In some situations, your Form SSA-1099 or Form RRB-1099 will show that the total benefits you repaid (box 4) are more than the gross benefits (box 3) you received. If this occurred, your net benefits in box 5 will be a negative figure (a figure in parentheses) and none of your benefits will be taxable. Do not use Worksheet 1 in this case. If you receive more than one form, a negative figure in box 5 of one form is used to offset a positive figure in box 5 of another form for that same year.

If you have any questions about this negative figure, contact your local SSA office or your local RRB field office.

Joint return. If you and your spouse file a joint return, and your Form SSA-1099 or RRB-1099 has a negative figure in box 5, but your spouse's does not, subtract the amount in box 5 of your form from the amount in box 5 of your spouse's form. You do this to get your net benefits when figuring if your combined benefits are taxable.

Example.

John and Mary file a joint return for 2010. John received Form SSA-1099 showing $3,000 in box 5. Mary also received Form SSA-1099 and the amount in box 5 was ($500). John and Mary will use $2,500 ($3,000 minus $500) as the amount of their net benefits when figuring if any of their combined benefits are taxable.

Repayment of benefits received in an earlier year. If the total amount shown in box 5 of all of your Forms SSA-1099 and RRB-1099 is a negative figure, you can take an itemized deduction for the part of this negative figure that represents benefits you included in gross income in an earlier year.

Deduction $3,000 or less. If this deduction is $3,000 or less, it is subject to the 2%-of-adjusted-gross-income limit that applies to certain miscellaneous itemized deductions. Claim it on Schedule A (Form 1040), line 23.

Deduction more than $3,000. If this deduction is more than $3,000, you should figure your tax two ways:
Figure your tax for 2010 with the itemized deduction included on Schedule A, line 28.

Figure your tax for 2010 in the following steps:

Figure the tax without the itemized deduction included on Schedule A, line 28.

For each year after 1983 for which part of the negative figure represents a repayment of benefits, refigure your taxable benefits as if your total benefits for the year were reduced by that part of the negative figure. Then refigure the tax for that year.

Subtract the total of the refigured tax amounts in (b) from the total of your actual tax amounts.

Subtract the result in (c) from the result in (a).


Compare the tax figured in methods (1) and (2). Your tax for 2010 is the smaller of the two amounts. If method (1) results in less tax, take the itemized deduction on Schedule A (Form 1040), line 28. If method (2) results in less tax, claim a credit for the amount from step 2(c) above on Form 1040, line 71, and write “I.R.C. 1341” in the margin to the left of line 71. If both methods produce the same tax, deduct the repayment on Schedule A (Form 1040), line 28.