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My father is already retired and was diagnosed, is a v. He…

Customer Question
My father is already...

My father is already retired and was diagnosed, is a v

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

He is a retired veteran diagnosed with cancer. Is there absolutely no way to approach the ir s because these did quality for medical under hardship. When they request additional info nformation, do I send letter stating medical hardship meets hardship needs?

Accountant's Assistant: Is there anything else important you think the Accountant should know?

Married filing joint. Mother has social security.

Submitted: 7 months ago.Category: Finance
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Answered in 3 minutes by:
12/19/2017
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,665
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Hi. My name's Lane...

...

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

...

Can you possibly re-state your question?

...

What is it that you're trying to accomplish? Get a tax bill waived? Penalties abated? Qualify for VA benefits?

...

Pleas provide a little more detail, about the purpose.

...

Thank you, I'll be here,

Lane

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Customer reply replied 7 months ago
He received letter of underreported information requesting additional info. He is a vet. Annuity payments from Army puts in financial hardship and yes, I would like penalties removed. Lane is there any way to get the annuity not taxed. I believe it was 1 st year receiving annuity payments. He did not draw full amount. Did 1with for medical hardship. He was diagnosed with cancer, married filing joint. They are saying he underreported income. It is on return, however in section that should not be taxable. The amount is $4101 and they do not have.
Customer reply replied 7 months ago
Is this indeed taxable or is there a way out? It did cause financial hardship.
Financial Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago

Military Disability Pay received as a pension, annuity or similar allowance for personal injury or sickness resulting from active service in the armed forces should not be included in taxable income if any of the following conditions apply:

  1. You were entitled to receive a disability payment before September 25, 1975;
  2. You were a member of the military (active or reserves) or were under a binding written commitment to become a member on September 24, 1975;
  3. You receive disability payments for a combat-related injury. This is a personal injury or sickness that:
    • Resulted directly from armed conflict,
    • Took place while you were engaged in extra-hazardous service,
    • Took place under conditions simulating, including training exercises such as maneuvers, or
    • Was caused by an instrumentality of war.
  4. You would be entitled to receive disability compensation from the Department of Veterans Affairs (VA) if you filed an application for it (the exclusion under this condition equals the amount you would be entitled to from the VA).

...

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Then, Veterans' benefits are also excluded from Federal taxable income.

...

The following amounts paid to veterans or their families are not taxable:

  • Education, training, and subsistence allowances
  • Disability Compensation and pension payments for disabilities paid either to veterans or their families
  • Grants for homes designed for wheelchair living
  • Grants for motor vehicles for veterans who lose their sight or use of their limbs
  • Veterans' insurance proceeds and dividends paid either to veterans or their beneficiaries, including the proceeds of a veteran's endowment policy paid before death
  • Interest on insurance dividends left on deposit with the VA
  • Benefits under a dependent-care assistance program
  • The death gratuity paid to a survivor of a member of the Armed Forces who died after September 10, 2001
  • Payments made under the compensated work therapy program
  • Any bonus payment by a state or political subdivision because of service in a combat zone
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