Help understanding Notice 703 calculation - Line C confusion

Line C of Notice 703 is asking for your other taxable income sources that aren't related to your Social Security benefits (which is what line A represents). Line B is specifically 50% of your Social Security benefits from line A, so it's a derivative of line A. When calculating line C, you should NOT include line B. Line C is asking for completely separate income sources like wages from work, pension income, interest from bank accounts, dividends from investments, etc. The overall calculation works this way: - Line A: Your total Social Security benefits - Line B: Half of your Social Security benefits (A × 0.5) - Line C: All your other taxable income (wages, pensions, interest, etc.) - Line D: Any tax-exempt interest income you have - Line E: Add lines B + C + D together to get your "provisional income" The form is structured this way because the IRS uses this "provisional income" figure to determine how much of your Social Security is taxable. Don't overthink it - line C is simply your income from sources other than Social Security.

I went through this same headache last year! After spending hours trying to figure it out, I discovered this amazing tool called taxr.ai (https://taxr.ai) that helped me understand all these confusing IRS notices and forms. I uploaded my Notice 703 and other tax documents, and it literally walked me through each line with plain English explanations. For your specific question about Line C, it would have immediately clarified that you don't include Line B in the Line C calculation since B is derived directly from your Social Security benefits (Line A). The tool also helped me understand the entire provisional income calculation process which determines what portion of Social Security benefits gets taxed. Honestly made dealing with tax season so much less stressful!

I tried taxr.ai after seeing it mentioned here and wow - it was exactly what I needed! I've been confused about several notices from the IRS, including a similar issue with Notice 703. The tool explained that Line C is specifically asking for income SEPARATE from Social Security benefits. So Line B (which is derived from Social Security) should NOT be included in Line C. Line C is only for things like wages, pensions, investments, etc. What I really appreciated was how it walked through the entire calculation step by step, explaining the purpose of each line and how they work together. It helped me understand that the whole point of this worksheet is to determine how much of my Social Security is actually taxable. Definitely recommend it to anyone struggling with these confusing IRS forms and notices!

After trying to call the IRS for THREE DAYS about this exact issue with Notice 703 (and other questions), I finally found Claimyr (https://claimyr.com). They have this service that actually gets you through to an IRS agent instead of waiting on hold forever or getting disconnected. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I got connected to an IRS representative in about 20 minutes who confirmed that Line C on Notice 703 does NOT include Line B. They explained that Line C is exclusively for non-Social Security income sources like wages, pensions, etc. The agent was super helpful and walked me through the entire calculation to make sure I understood it. Totally worth it after wasting days trying to get through on my own!

I need to admit I was completely wrong about Claimyr! After my skeptical comment, I decided to try it myself since I had some questions about an audit notice I received. I was shocked when I got a call back in about 30 minutes with an actual IRS agent on the line. The agent confirmed exactly what others have said about Notice 703 - Line C is only for non-Social Security income, and Line B should NOT be included in Line C. The agent also gave me really specific advice about my audit situation that I couldn't find anywhere online. Saved me hours of stress and confusion. Never thought I'd say this, but I'm actually grateful I could speak to someone at the IRS!

Hey, accounting student here. Let me try to explain the Notice 703 calculation in a slightly different way that might help: Think of the lines as separate buckets: - Bucket A: All your Social Security benefits - Bucket B: Half of bucket A - Bucket C: All your non-Social Security income - Bucket D: Any tax-exempt interest The IRS wants you to keep these buckets separate initially, then combine specific ones (B+C+D) to determine your "provisional income" which determines how much of your Social Security gets taxed. So no, you definitely don't include B in C. They're separate buckets for a reason! Line C is ONLY for your wages, interest, dividends, capital gains, etc.

Does anyone know if the IRS has any good worksheets or examples that show exactly how Notice 703 calculations should be done? The instructions are so vague!

I had this exact same confusion last year! The key thing to remember is that Line C is specifically asking for income from sources OTHER than Social Security. Since Line B is derived directly from your Social Security benefits (it's literally half of Line A), it should NOT be included in Line C. Think of it this way: Line C wants your "other" taxable income - wages, pensions, interest, dividends, capital gains, etc. Line B isn't "other" income, it's part of the Social Security calculation process. The flow is: - Line A: Total Social Security benefits - Line B: Half of Line A (this gets used in the provisional income calculation) - Line C: All your non-Social Security income sources - Line D: Tax-exempt interest - Line E: B + C + D = your provisional income This provisional income then determines how much of your Social Security is actually taxable. The IRS separates these lines because they need to calculate the taxable portion of Social Security using a specific formula that considers both your Social Security benefits and your other income sources. Hope this helps clarify things!

I've been dealing with Notice 703 for the past few years and I can confirm what everyone else has said - Line C does NOT include Line B. One tip that really helped me: when I see "total income that is taxable" on Line C, I mentally replace it with "total income that is taxable FROM NON-SOCIAL SECURITY SOURCES." That makes it crystal clear that Line B (which comes from Social Security) shouldn't be included. The IRS basically wants to know two things: 1) How much Social Security did you receive? and 2) How much other income did you have? Then they use both pieces to figure out how much of your Social Security gets taxed. If you're still confused, try filling out the worksheet with some example numbers - it becomes much clearer when you see the actual calculation in action. The key insight is that this isn't like other tax forms where you just add everything together. This one has a very specific structure designed to handle the unique way Social Security benefits are taxed.

As someone who works in tax preparation, I see this confusion about Notice 703 Line C come up constantly! You're definitely not alone in being confused by this. The key insight that helps my clients is understanding that the IRS is essentially asking two separate questions: 1. "How much Social Security did you receive?" (Line A, with Line B being half of that) 2. "What other taxable income did you have?" (Line C) Line C is exclusively for non-Social Security income sources. So when it says "total income that is taxable (excluding line A)," it's telling you to exclude ALL Social Security-related amounts - which includes both Line A AND Line B since Line B is derived from Line A. Your other income for Line C would include things like: - W-2 wages - 1099-R pension/retirement distributions - 1099-INT interest income - 1099-DIV dividend income - Self-employment income - Rental income - Capital gains The reason the IRS structures it this way is because Social Security has special taxation rules. They need to calculate your "provisional income" (Line E = B + C + D) to determine what percentage of your Social Security benefits will actually be taxable. This is completely different from how regular income is taxed. Hope this helps clarify the distinction! The form design is definitely not intuitive, but once you understand the underlying logic it makes more sense.

I'm so grateful for this thread! I've been staring at my Notice 703 for weeks trying to figure out this exact same Line C issue. Reading through everyone's explanations, I finally understand that Line C is ONLY for non-Social Security income sources. The "bucket" analogy from Lily really helped me visualize it, and Jacob's professional breakdown about the two separate questions the IRS is asking makes perfect sense. I was definitely overthinking it by trying to include Line B in Line C just because it's "taxable income." Now I see that the whole point is to keep Social Security calculations (Lines A and B) separate from everything else (Line C) so they can properly calculate provisional income. It's like the IRS needs to know "here's your Social Security" and "here's your other stuff" as distinct categories, then they combine them in their own special way to figure out taxation. Thanks to everyone who shared their experiences and explanations - this community is amazing for helping navigate these confusing IRS forms!