I am between 66 and 70, and collecting Social Security while still working. My employer has a 401(k), and I'm having the $24,000 max deducted from my paychecks. (They don't match any of it, alas.) And I'm planning to sock $6500 into a traditional IRA this year. So I have the great pleasure of filling out Worksheets 1, 2, and 3 in Appendix B of Pub 590-A, to determine my deductible IRA contribution amount and my taxable Social Security amount.
Here's my question. On Worksheet 1, line 17 says my taxable Social Security benefits are $21,254. But Worksheet 3 line 19 says taxable Social Security is $15,874. Is it possible for those two numbers to be different? That doesn't seem logical, and in fact in the IRS's example in Appendix B both lines are $10,200.
I made an Excel spreadsheet for these worksheets, and I've carefully checked my logic twice. I even plugged in the numbers from the IRS example, and my spreadsheet calculated the same numbers as the worked example in Appendix B. But I'm nervous about the difference between the two numbers in my situation.
Also, the higher value in Worksheet 1 pushes my modified AGI above $61,000, so as a single person it means I can't deduct the full $6500 I want to put in my IRA. Worksheet 1 line 17 does say "to be included in modified AGI for traditional IRA deduction purposes", and Worksheet 3 line 19 does not. That at least suggests the two numbers aren't always the same, but I'd appreciate confirmation or a "no, they should be the same so you must have screwed up".
Thanks!