Lucho Posted June 5, 2014 Report Share Posted June 5, 2014 I have a couple (client), husband already retired wife still working. Wife contributed $6000.00 to her IRA for year 2012. IRS sent a letter to mi clients stating they owe more taxes; when I read the letter and the adjustments, they are incrementing the taxable SS Benefit exactly for the $6000.00 adjustment (in other words, they are adding back the $6000.00 adjustment to the total income. I do not see any mistake in the worksheet for line 20 (1040) social security benefits (all computations are correct including line 7 of that worksheet. Is it me or an IRS employee making a mistake? I will appreciate any help. Lucho Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted June 5, 2014 Report Share Posted June 5, 2014 I thought there was a special rule for folks receiving SS benefits and making an IRA contribution. How old are your taxpayers? Rich Quote Link to comment Share on other sites More sharing options...
Lucho Posted June 5, 2014 Author Report Share Posted June 5, 2014 I thought there was a special rule for folks receiving SS benefits and making an IRA contribution. How old are your taxpayers? Rich For year of contribution, husband (retired) 70 and wife (not retired and making the contribution) 54 Thank you, Lucho Quote Link to comment Share on other sites More sharing options...
joanmcq Posted June 5, 2014 Report Share Posted June 5, 2014 Do you have the contribution tagged to the proper taxpayer? Quote Link to comment Share on other sites More sharing options...
Lucho Posted June 5, 2014 Author Report Share Posted June 5, 2014 Do you have the contribution tagged to the proper taxpayer? Yes Lucho Quote Link to comment Share on other sites More sharing options...
jlewis Posted June 6, 2014 Report Share Posted June 6, 2014 If you haven't already, you may want to use worksheet in IRS pub 590, appendix B to see if it comes out the same. Apparently one of the wrinkles involved is if covered by retirement plan and the worksheet itself is 3 pages to determine deductibility/taxability of soc sec benefits with IRA deduction. Just a thought. 1 Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted June 6, 2014 Report Share Posted June 6, 2014 Good idea. If you work through the IRS worksheet and get a different result, it will most likely highlight for you the difference. And if not, you can then use that to show the IRS their error. Remember, the GAO says that almost half of all IRS error notices are incorrect, at least in part. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted June 6, 2014 Report Share Posted June 6, 2014 Did the client take any distributions from retirement accounts? That also plays into the decision about deductibility. Quote Link to comment Share on other sites More sharing options...
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