I received a lump-sum Social Security benefit. It covered several prior years; how can I report that to the IRS?
Generally, you use your current-year income to figure the taxable part of the total benefits received in that year. However, you may be able to figure the taxable part of a lump-sum payment for an earlier year separately, using your income for the earlier year. You can elect this method if it lowers your taxable benefits. Under the lump-sum election method, you refigure the taxable part of all your benefits for the earlier year (including the lump-sum payment) using that year’s income. Then you subtract any taxable benefits for that year that you previously reported. The remainder is the taxable part of the lump-sum payment. Add it to the taxable part of your benefits for the current year (figured without the lump-sum payment for the earlier year). See IRS Publication 915 for more information on this method. Q: I started receiving Social Security this year. My only other income is from my company retirement and some interest. I pay federal taxes on this income. Will I have to pay any t
