Steve M Posted February 22, 2010 Report Share Posted February 22, 2010 Client has received disability from private insurer for 3 years. Social security decided that she is truly disabled and now paid her in one year all disability payments going back 3 years. She had to pay back insurance company an amount equal to the social security payment. I can't remember how to account for this on tax return. Seems like there were several options, but can't find any info on it. Can anyone help? SteveM Quote Link to comment Share on other sites More sharing options...
taxtrio Posted February 22, 2010 Report Share Posted February 22, 2010 Deduction for repayment of amounts under a claim of right if over 3,000.00 Claimed as Misc Itemized Deductions Not Subject to the 2% limitation. Page 4-23 Taxbook. Also see Tab 3. page 3-21 "repayments". For detail. I'm sure it's also explained in Pub 17. You have a choice of Sch A, or Refigure tax from the earlier year without the income that was later repaid. Subtract the regfigured tax from the tax shown on the original return. Enter the result on line 70, form 1040and enter IRC 1341 next to line 70. Taxtrio Quote Link to comment Share on other sites More sharing options...
Steve M Posted February 22, 2010 Author Report Share Posted February 22, 2010 Deduction for repayment of amounts under a claim of right if over 3,000.00 Claimed as Misc Itemized Deductions Not Subject to the 2% limitation. Page 4-23 Taxbook. Also see Tab 3. page 3-21 "repayments". For detail. I'm sure it's also explained in Pub 17. You have a choice of Sch A, or Refigure tax from the earlier year without the income that was later repaid. Subtract the regfigured tax from the tax shown on the original return. Enter the result on line 70, form 1040and enter IRC 1341 next to line 70. Taxtrio Quote Link to comment Share on other sites More sharing options...
Steve M Posted February 22, 2010 Author Report Share Posted February 22, 2010 Thanks, now that you identified it, it comes back to me. Really appreciate the help. SteveM Quote Link to comment Share on other sites More sharing options...
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