Social security taxable income mistake

Forum|Forum|1 year ago
March 15, 2025
9 replies
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I think Turbo make a significant mistake on calculating taxable SS income for 2024. My combined SS income was $67,968. Based on my entire income (well above $44,000), 85% of that should have been considered taxable income. But Turbo inexplicably said only 65%, or $44,460, was taxable. The IRS of course pushed it up to 85% in a letter to me that increased my tax liability. 65% isn't even a threshold under the IRS, far as I know! I wonder how many other people had this happen to them? And by the way, trying to get Turbo reps to respond is more painful than root canal surgery. I'm still awaiting an answer. What about that 100% guaranteed accuracy!

AnnetteB6

Take a look at the following TurboTax help article to learn how to make a claim against the guaranty provided by TurboTax:

How do I submit a claim under the TurboTax 100% Accurate Calculation Guarantee or 100% Accurate, Expert Approved Guarantee?

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

Lars6Author

Thanks AnnetteB6 but I suggest you look at that link. Notice it does NOT include 2024 tax year as an option. What shall I do?
Beyond that, I think customers are owed an explanation of what happened.
Thanks

Lars6Author

Hi AnnetteB6, Any thoughts on how I submit an accuracy claim?

Thanks

jimkeith53

I had the same issue on my 2024 federal taxes. Our Social Security benefits were reported as $69,220 The taxable amount on Turbo Tax was shown as $31,841. . .or 46%. The correct amount should have been $58,837. . .or 85%. The confusion was how the following question was worded in Turbo Tax. . ."Did you or your (wife/husband) live in a country where Social Security benefits are taxed?" I checked off "NO" when asked if it applied to me. The next question asked if it also applied to my (wife/husband) and I said "YES". . meaning the answer applied to both of us.

My suggestion would be to edit the original question and separately ask:

1. "Did you live in a country where Social Security benefits are taxed?" YES or NO

2. "Did your (wife/husband) live in a country where Social Security benefits are taxed?" YES or NO

Lars6Author

Totally agree jimkeith53. The question is poorly worded. Reading your explanation, I now think that’s why I (apparently) answered incorrectly. I sure hope TT changes it next year.

llshannon

This happened to me too, resulting in one of those CP12 letters from the IRS. It's quite annoying. I hope TurboTax will get this fixed before the next tax cycle. I didn't re-check TurboTax's calculations because they had always been perfect before.

Lars6Author

I assume (hope?) TurboTax employees read these posts and kick the issue to the appropriate folks to make the change. There are still a weeks left in this tax cycle of course.

LaneyN

I believe this happened to us also. Our Federal tax return was reduced by $3,000 unbeknownst to us when we received our refund by direct deposit. We used the refund tracker and the explanation was shown in there. They said there was an error in calculating SS taxable income.

Lars6Author

Yes, @LaneyN sounds exactly like the same situation, an incorrect response to the ambiguous question about living in certain countries. Again, TT needs to fix that.

bartolettisf

I had this same issue. Turbo Tax calculated 47% as taxable social security amount when further research indicates that this should have been 85%. Interestingly, our 2023 tax return in Turbo Tax shows 85%. I spent all afternoon trying to find someone at Turbo Tax to help with this. Now, I’ve decided that the IRS is right, so will pay per their notice.

Lars6Author

@bartolettisf If you're able to read the thread, you'll see that you most likely answered the question about whether you lived in a foreign country incorrectly--- as I did and multiple TT users did too. The wording on the question is quite ambiguous. The result is that less of your SS income is reported as income and that's wrong. A TT Expert posted a screen shot of the foreign-country question and the proper way to answer it.

bartolettisf

As you have probably learned by now, the guarantee is only for penalties and interest (and maybe a refund of the cost of the program)

DawnC

You have to have marked NO on the following screen. If you marked Yes, the income would have shown as non-taxable.

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Extaxman

It appears TurboTax failed to properly calculate the taxable portion of my SSA income as well. I went from refund status to receiving a CP11 stating I owe additional tax. TurboTax a.i. chat is no help and I am overseas at the moment; so my only recourse is to pay the amount on the notice before the due date and possibly work on a1040x later if I disagree with the IRS calculation. Which is probably correct. The TurboTax accuracy guarantee only covers penalties and interest, it appears, not aggravation.

m_szilagyi

I am dealing with this! I received an IRS notice CP11 stating that the taxable Social Security benefits were changed because they were calculated incorrectly. I went from a rare refund in a year when the standard deduction went UP, to more than $2500 owed. This has caused concern for future returns and questioning the liability of Turbotax in this instance. I spoke with a Turbotax technician who states that they calculate this similarly every year but it seems as though the software dropped the ball! This just sucks! Are we supposed to review how the software is done now?????

VolvoGirl

There is a new question this year asking if you lived in a foreign place. People have been answering it wrong or skipping it. Go back through the Social Security entries and check, check for each spouse if married.

Some Posts
4/26/25 This user missed the question for the spouse
https://ttlc.intuit.com/community/retirement/discussion/re-why-would-tt-miscalculate-and-underreport-my-filed-1040-sr-social-security-benefits-by-64-costing/01/3676051#M250633

4/23/25
https://ttlc.intuit.com/community/after-you-file/discussion/re-irs-changed-refund/01/3674438#M798051

binghamrs

The same thing happened to me (just received the IRS notice today). Instead of getting a refund, I have to pay some tax. As far as the TurboTax "100% Guarantee", that only covers any penalty. We are still liable for any tax. Pretty much a useless guarantee - who is going to bother filing some paperwork to recoup 58 cents? There is definitely a coding error in TurboTax software for 2024.