Income – Social Security Benefits

Time Requirement: 10 minutes

Purpose

Social Security and equivalent railroad retirement benefits may or may not be taxable. Determining the correct taxable portion of benefits is essential for an accurate return.

Objectives

• Determine the taxable portion of Social Security and railroad retirement benefits
• Determine the most advantageous method of reporting lump-sum Social Security benefits
• Report Social Security and railroad retirement benefits on the tax return

Teaching the Lesson

Refer to the Lesson Plan for helpful instructor notes, visual aids, TaxSlayer® demos, and Internet links. Prompt students to share what they know about Income.

• Explain the differences between Social Security benefits and Railroad Retirement Benefits (RRBs).
• How are these benefits reported to the taxpayer?
• When are benefits nontaxable?
• How do you handle a lump-sum payment for benefits from previous years?

Refer students who may want to work independently to Publication 4491, Income – Social Security Benefits.

Key References

This lesson will refer to the following publications and forms:

• Form 13614-C
• Pub 4012, Income tab
• Pub 17, Chapter 11, Social Security and Equivalent Railroad Retirement Benefits

All references to materials can be found by clicking Job Aids and Media buttons. There are also links to helpful tools that can be found on the irs.gov public portal. For this lesson, students can link to the following sites for additional help:

• Interactive Tax Assistant to learn more about Social Security benefits
• Tax Topic - Social Security and Railroad Retirement Benefits
• FAQs - Social Security Income

TaxSlayer® Demos and Tutorials

It is recommended to go to the Practice Lab and access the latest TaxSlayer tutorial for this lesson. The TaxSlayer tutorials can be found by going to the Practice Lab and clicking on the link for TaxSlayer IRS training.

Publication 4012, Income tab, includes a chart listing and describing the various Social Security and retirement benefits forms and how to enter benefits in TaxSlayer.