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Lev I'm a medically retired (Service-Connected Disability)

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Hi Lev I'm a medically retired...
Hi Lev
I'm a medically retired (Service-Connected Disability) peace officer (California in 1994). No tax filing problems until recently. Rec'd mail from IRS stating 2013 income from disability should have been reported as income. Turned 48 that year. Used Turbotax for 1st time that year...probably the issue. :)
What should I send/demonstrate to the IRS to get them to discount this as income? What documentation, etc?
Submitted: 2 years ago.Category: Tax
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6/13/2015
Tax Professional: ShawnA, CPA, Professor, CFP. CGMA, Business Consultant, Professor, PFS I have decades of experience answering these questions. replied 2 years ago
ShawnA
ShawnA, CPA, Professor, CFP. CGMA, Business Consultant, Professor, PFS I have decades of experience answering these questions.
Category: Tax
Satisfied Customers: 2,884
Experience: CPA, Professor, CFP. CGMA, Business Consultant, Professor, PFS I have decades of experience answering these questions.
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Hello. My specialty is focusing on YOUR Financial needs. Financial Planner/Business Owner for 20 years. Retired CPA
I assume Lev will be on at some time. Please let us know if you would accept an answer from another expert or if you prefer to wait for Lev.
Have a great day.
Ask Your Own Tax Question
Customer reply replied 2 years ago
Ill wait
Tax Professional: Lev, Tax Advisor replied 2 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,664
Experience: Taxes, Immigration, Labor Relations
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Hi and welcome to our site!
The IRS based their decision whether your disability benefits are taxable or not - on how these benefits are reported by the payer.
The payer most likely reported these payments as taxable - and that is why the IRS assessed additional tax liability.
Most likely - you received form 1099R reporting your disability benefits for 2013. If you are not able to locate that form - you may either contact a payer asking for duplicate or request your tax account transcript from teh IRS and verify that reporting.
.
Another issue - if the payer correctly reported these disability benefits as taxable.
If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled.
Beginning on the day after you reach minimum retirement age, payments you receive are taxable as a pension or annuity. Report the payments on lines 16a and 16b of Form 1040 or on lines 12a and 12b of Form 1040A.
.
Certain military and government disability pensions are not taxable. You may be able to exclude from income amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following government services.
•The armed forces of any country.
•The National Oceanic and Atmospheric Administration.
•The Public Health Service.
•The Foreign Service.
There are certain conditions for exclusion.
So - please verify if your disability benefits are based on personal injury or sickness resulting from active government services listed above.
Let me know if you need any clarification this matter.
I am here to help you with all tax related issues.
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Lev
Lev
Lev, Tax Advisor
Category: Tax
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