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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29774
Experience:  Taxes, Immigration, Labor Relations
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Are taxes paid while awaiting an approved social security disability

Customer Question

are taxes paid while awaiting an approved social security disability hearing refundable?
Submitted: 2 years ago.
Category: Tax
Expert:  Lev replied 2 years ago.
There is NO taxes on expected income. You will pay income tax based on WHEN income is constructively received.If you paid estimated income taxes - these amounts are credited toward your tax liability (which is calculated on the tax return) and if overpaid - your would claim a refund on your tax return.
Customer: replied 2 years ago.
I'm not sure I understand. My disability (for SSDI) began 11/11/2015. I paid about $50,000 in taxes in 2013, from a large 401k withdrawal I had made to live on, while awaiting my SSDI hearing. The hearing was favorable and i'm now classified as disabled. I paid no taxes in 2014. Are any of the taxes I paid in 2013 from my 401k refundable?
Expert:  Lev replied 2 years ago.
That is exactly what we discussed - if you took 401k distribution in 2013 - the administrator likely withheld some taxes from that distribution.So - you woudl need to do following: -- prepare your 2013 tax return -- on that tax return - you woudl calculate your actual tax liability based on your total income, filing status, deductions, etc -- on the same tax return - you would need to credit withholding toward your tax liability -- and finally - if your withholding is more than your tax liability - you will get the difference refunded.If you did not file your 2013 tax return - you may do that now. If you did file - but some corrections are needed - you may amend that tax return and made changes.For instance - if you did not mark that you were disabled at the time of distribution and paid penalties - but you actually was disabled - that correction may be made on the amended tax return and penalties woudl be refunded to you.You generally have three years to claim a refund.Let me know if you need any help with reporting.