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Tax Planner - Compute taxable Social Security income

Rocket J Squirrel
Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
Tax Planner doesn't calculate the taxable portion of Social Security income. It should. The following is from online help.

      In the Taxable Social Security Benefits field, enter the appropriate value.
  • The Basic Rule. Up to 50% of Social Security benefits are taxable if total “provisional income” (adjusted gross income, tax-exempt interest and one half of Social Security benefits) exceeds a base amount: $25,000 for single taxpayers and $32,000 for married taxpayers filing jointly.
  • The Second Tier. A second tier of income tax of up to 85% of Social Security benefits received kicks in (1) for single taxpayers with provisional income over $34,000, (2) for married taxpayers filing jointly with provisional income over $44,000, and (3) for all married taxpayers who file separate returns, but do not live apart.
  • Currently, the Tax Planner doesn't automatically calculate the taxable portion of your Social Security benefits. As a result, your taxable income may be higher than expected. To compute your taxable Social Security benefits, please refer to the worksheet in your Form 1040 instructions or IRS Publication 915.

Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
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  • Burt - Q17 H&B
    Burt - Q17 H&B Member ✭✭
    I know that 85% of my Social Security will be taxable. So, on my SS benefit, I just split the gross income up between a taxable income category (ie. 85%) and a non-taxable income category (ie. 15%). This makes Tax Planner closer to accurately forecasting my taxable liability.
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    edited August 2019
    That workaround fails if you feed Quicken data to TurboTax. Both TT and Quicken's Tax Planner rely on Tax Line Items, not categories. TT wants to know all your SS income because, unlike Quicken, it will calculate the taxable portion of SS.
    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Yes, you are right. But, I have another report that shows me the total SS payments which I can easily enter manually into TurboTax. It's the AGI and taxable income for the year that I am trying to forecast to keep below certain income levels. BTW, I also have a spreadsheet that does this calculation and Tax Planner and spreadsheet are very close if all data is entered correctly (including the Qualified Dividends amount.
  • R DIlly
    R DIlly Member ✭✭
    I don't seem to be getting Social Security represented at all in my Tax Planner report. Does anyone see it?

    That seems like a glaring omission. I'd much rather have the inccome be on the high side! (That's a big part of our income these days.)
  • Lenn
    Lenn Member ✭✭
    Another work around: In Tax Planner on the taxable social security page, enter a negative adjustment for the non-taxable portion. This will help Tax Planner to more accurately calculate projected taxes. It also allows Quicken to maintain the gross SS to pass to Turbo Tax.
  • Rocket J Squirrel
    Rocket J Squirrel SuperUser, Windows Beta ✭✭✭✭✭
    R DIlly said:
    I don't seem to be getting Social Security represented at all in my Tax Planner report. Does anyone see it?

    That seems like a glaring omission. I'd much rather have the inccome be on the high side! (That's a big part of our income these days.)
    Yes, I see it, but I had to set it up. What you are showing is the tax summary report. Here is mine.
    You need a top-level income category named Social Security. If you are single, you must assign it the tax line item "Form 1040:Social security income, self". If you are married, you should have 2 subcategories, 1 for each spouse, with the appropriate "self" & "spouse" tax line items.

    Quicken user since version 2 for DOS, now using QWin Premier Subscription on Win10 Pro.
  • Tax Planner not properly supporting the tricky Social Security calculation makes it almost useless for me now. I was able to get the calculation right in an Excel spreadsheet by mimicking the 1040 Social Security Benefits Worksheet.

    Since I was born pretty much smack in the middle of the Baby Boom generation, I don't think I'm alone in being disappointed.
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    It would be great if Tax Planner would calculate the taxable portion of SS income.  At a minimum, Quicken should add a field where we can enter the taxable percentage instead of the taxable dollars.
    Until/unless this improvement is added to Tax Planner the easiest way to get a good taxable SS income dollar number to enter into Tax Planner is to use any one of a number of online taxable SS income calculators.  No need to manually calculate that number.  My favorite is on The Motley Fool because it is so easy to use:  https://www.fool.com/retirement/2016/06/06/social-security-tax-calculator-are-your-retirement.aspx#top.  (Don't be concerned about the date of the article being 2016.  The calculator at the bottom of the article is updated every year.)

    (QW Premier Subscription: R33.19 on Windows 10)
  • LarryC
    LarryC Member ✭✭
    A key benefit to Quicken would be properly calculating quarterly tax payments. Because it doesn't account for Social Security income properly, the tax planner feature is worthless to me. In my case, this GROSSLY overstates my tax liability. This should be an easy fix that would benefit many users.
  • Boatnmaniac
    Boatnmaniac SuperUser ✭✭✭✭
    LarryC said:
    A key benefit to Quicken would be properly calculating quarterly tax payments. Because it doesn't account for Social Security income properly, the tax planner feature is worthless to me. In my case, this GROSSLY overstates my tax liability. This should be an easy fix that would benefit many users.
    I agree.  Tax Planner should be able to calculate the taxable portion of our gross SS income for us instead of us needing to do that separately.  At a minimum, Quicken should stop pulling in SS income data from the categories in Quicken and make the User Entered field the default forcing us to enter something there, instead.
    Since it does not currently do that, Tax Planner does give us the option to override the Quicken SS income category by entering the taxable portion in the User Entered field.

    If we do not enter the taxable portion of SS in this User Entered field Quicken will simply use our gross SS income from the categories used in Quicken and our tax liability in Tax Planner can be grossly overstated. 
    There are several online calculators available to determine what portion of your SS will be taxable and they are pretty easy to use.  One I like because it's pretty easy to use is https://www.fool.com/retirement/2016/06/06/social-security-tax-calculator-are-your-retirement.aspx.  The article is out of date but the calculator is updated each year.
    (QW Premier Subscription: R33.19 on Windows 10)
  • Ps56k2
    Ps56k2 SuperUser ✭✭✭✭✭
    edited September 2020
    Just ran across this topic - and posted the same Q&A -
    before I found these couple of threads...
    For my planning - I would just like to see the total SSA benefits paid out, and use that as "added income" - then wrestle with the actual percentage later at actual tax time.
    So... this - @Rocket J Squirrel comment worked perfectly - Tax Planner picks it up.
    You can have a top-level income category named Social Security.
    If you are single, you must assign it the tax line item "Form 1040:Social security income, self". If you are married, you should have 2 subcategories, 1 for each spouse, with the appropriate "self" & "spouse" tax line items.
    Quicken 2020 Deluxe - Subscription - Windows 10
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