Home     About Us    Contact Us     Contribute     Privacy
Investing
Stocks
Bonds
Mutual Funds
Biz
Credit
Career
College
Economics
Tax
More
 
 
Marketplace
Related Articles
Related Definitions
Related Categories
Tip of the Day

Tip of the Day Avoid Fees

Avoid Fees - When using long-term investments as a money-earning vehicle, it is wise to remember that any returns that are made on that money must deduct any fees paid...

read entire tip

Related Podcasts
Recently Added
Other Great Sites
 

Filing Back Taxes

If you owe back taxes the IRS will in most cases eventually catch up with you. This Q&A is to give you have an idea of what you need to do to pay back taxes and comes from the IRS web site. Be sure to check IRS.gov to ensure you have the latest information.

Question: I received social security benefits this year that were back benefits prior years. Do I amend my returns for prior years? Are the back benefits paid in this year for past years taxable for this year?

Answer: You cannot amend returns for prior years. You must include the taxable part of a lump-sum (retroactive) payment of benefits received (reported to you on Form SSA-1099) in the current year in your current year's income, even if the payment includes benefits for an earlier year.

There are two ways to determine the amount of income to include:

? You can use your current year's income to figure the taxable part of the total benefits received in the current year. OR

? You may make an election to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year.

o You can select the lump-sum election method if it lowers the taxable portion of your benefits.

o Under this method you refigure the taxable part of all your benefits for the earlier year using that year's income.

o Then you subtract any taxable benefits for that year that you previously reported.

o The remainder is the taxable part of the lump sum payment.

There are worksheets in Publication 915, Social Security and Equivalent Railroad Retirement Benefits, to help you calculate the taxable portion using this method.

This is just an example of the information you can find on the IRS website. Another place to look for information regarding paying back taxes or other tax issues can be found online with a search engine. In some cases you may need to consult an accountant or attorney if you have a complicated situation with your taxes.

Discuss It!
Most Popular Articles
Most Popular Definitions
 
Daily Definition

Definition of the Day Quick Ratio

Definition: A ratio that measures a company's ability to meet its current liabilities with its liquid assets. TeenAnalyst Advice: It's important that a company be able to pay their debts and other ...

read entire definition

 
 

 

 

Home     About Us    Contact Us     Contribute     Sitemap

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Copyright © 2009 TeenAnalyst.com