I just got back from trying to get my taxes done. But the people at H&R Block sound confused about how to solve my problem. This all started back in 2015 When my wife became ill and ended up on LTD with her work. Hartford was the insurance paying her $2400 a month til the end of 2016. At this time Hartford wanted to use there Lawyers to make S/S pay for her disability but S/S denied my wife the first time. At this time in 2015 and 2016 we filed are taxes with HR block. Well what have happened in 2018 Hartford won the case with S/S and S/S sent my wife the full amount from day one of her disability in the amount of $42,620 well we had to keep that money in our savings account til Hartford sent us their letter telling us how much of an overpayment they gave us. The letter stated we owed them $31,640 so we let them draw that amount out of are account. Now we got a from that the $42,620 they paid us my be taxable. Come to find out from HR block that we never claimed any of that money from 2015 and 2016 tax season! Due to the fact they said because Hartford sent there forms each of those years not as disability income but as sick pay???? So HR block didn’t put in as income!
My best advice would be to wait and see what happens. It's not clear exactly whether this income was, in fact, taxable and you filed your returns in good faith -- hiring a professional tax preparer -- believing your tax returns to be true and accurate. After 3 years, your tax returns will be closed -- that means, that IRS cannot assess a deficiency on those return. Just bear in mind that this could happen, and keep some money in reserve in case the IRS does assess a deficiency and you have to pay more taxes.
Ms. Willi is a tax attorney, CPA, and Ohio-Certified Specialist in Estate Planning, Trust & Probate Law, with offices in Westerville, Ohio. She serves client families and private business owners throughout Ohio. Ms. Willi responds to Avvo questions as a public service to help educate and provide general guidance to questioners, but her responses are not legal advice and do not create an attorney-client relationship. Her posts are provided for informational purposes only and are not a substitute for advice provided by an attorney or licensed tax professional. Her phone number is 614-890-0500 and her website is www.willilaw.com.
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