Irs Taxes On Retro For Compensation

[Josephine]

Best to you and family and remember to never take out 10k at once from bank as they tell IRS and then you have a problem and have to pay taxes on the 10k!! (9999.99 is ok not reported but 10000. is. I mean that is in one day)

Picked this up from rentalguys success story.

I am a bit concerned:

I took the six figure 16 year retro and deposited it into my bank in my name and left it there for 24 hours and then went back to the bank and the teller wrote a authorized check for the full amount in my husbands name.

This he took and paid off the mortgage.

Does this mean that now I will have to pay taxes on this money,

for the amt would be more than I have.

Thanks,

Betty

[carlie]

I took the six figure 16 year retro and deposited it into my bank in my name and left it there for 24 hours and then went back to the bank and the teller wrote a authorized check for the full amount in my husbands name.

This he took and paid off the mortgage.

Does this mean that now I will have to pay taxes on this money,

for the amt would be more than I have.

Thanks,

Betty

What is an Authorized Check ???

carlie

[rentalguy1]

I don't believe so, Betty. Once that money is in your name, it yours. I think it is a rumor on the taxes, but I do know that excess amounts of money being moved about gets flagged. My dad routinely moves amounts larger than $10K in and out of accounts and he has never been taxed. You can check with your bank to be safe, though.

[Josephine]

I took the six figure 16 year retro and deposited it into my bank in my name and left it there for 24 hours and then went back to the bank and the teller wrote a authorized check for the full amount in my husbands name.

This he took and paid off the mortgage.

Does this mean that now I will have to pay taxes on this money,

for the amt would be more than I have.

Thanks,

Betty

What is an Authorized Check ???

carlie

Carlie,

That was a bit of a puzzlement to me also. The teller placed a telephone call to make sure that I was present to do the transfer and then three tellers had to sign the check.

Hope this makes sense.

Betty

[Josephine]

I don't believe so, Betty. Once that money is in your name, it yours. I think it is a rumor on the taxes, but I do know that excess amounts of money being moved about gets flagged. My dad routinely moves amounts larger than $10K in and out of accounts and he has never been taxed. You can check with your bank to be safe, though.

Shane,

I know most of the money is gone, for I was not going to take any chances of the VA wanting it back. Paid off mortage, charge cards, and the car we purchased last year. Kept just enough money for emergencies and renovations.

The money is not in my name anywhere, only the first 24 hours.

Thanks,

Betty

[rentalguy1]

The reason for the three tellers was because it was a 6-figure check. They have to have strict accountability over that. They did the same thing when I picked up my $30K inheritence check a few years ago.

[jbasser]

Retroactive is the term. It is retroactive compensation that you would have received.

It is protected bu the 38.CFR.13.111 it is not taxable.

§ 13.111 Claims of creditors.

top

Under 38 U.S.C. 5301(a), payments made to or on account of a beneficiary under any of the laws relating to veterans are exempt, either before or after receipt by the beneficiary, from the claims of creditors and State and local taxation. The fiduciary should invoke this defense where applicable. If the fiduciary does not do so, the Veterans Service Center Manager should refer the matter to the Regional Counsel for appropriate action.

[40 FR 54251, Nov. 21, 1975]

[stillhere]

Rental is correct on the three teller rule, anytime that kind of money is moved or taken out of an account 3 tellers or a teller and the floor manager at the time need to sign off on it.

Funny story sort of: Years ago right about when I got back from Nam. My then steo father had an accident and he got a check from the insurance for ithink around $600 bucks to fix it. Well he goes to the bank the check was drawn on and the teller tells him she is going to have to have the manager sign off on the check He thought it was strange at the time but didn't say anything. She comes back after having sign by the branch manager no less. She begins to count out I think it was around $13,000 something and puts it in a sack and gives it to my step dad.

He comes out to the car were I was waiting and says come on lets go! He then says look and the money in the sack, well I looked and all the cold hard cash and said to him at the time what are you going to do? Well he said first lets get some beer then lets go get your mother.

He kept the money but the bank caught up to their mistake and he ended up having to pay back all the money above what the actual amount of the check was for!!

Tha is one of the reasons for the 3 teller rule but sometimes that does not work!!

Stillhere

[Pete53]

No not one dime either this year or for last 40 is taxable. Not even reportable unless you decide to report it.

[Josephine]

The reason for the three tellers was because it was a 6-figure check. They have to have strict accountability over that. They did the same thing when I picked up my $30K inheritence check a few years ago.

Thanks, Shane,

I was beginning to become concerned. Seems like my husband and I have

already done one fool thing for the year.

I wondered where our tax rebate, free spending money was, so

I called as I knew I was to get that letter for July 4th, well

seems we forgot to sign our return.

Of course we had no concerns upon filing for we had to pay in

$1300.00 and a penalty for owing the IRS the money.

Well, they took their money right away and cashed the check,

but we haven't siged our returns. When I called, the lady

told me they had mailed us on June 25th some type of voucher to

sign.

Man when it rains around my house it pours.

Thanks a bunch!

Have fun waiting for your large retro.

Betty

[Josephine]

No not one dime either this year or for last 40 is taxable. Not even reportable unless you decide to report it.

Pete,

Thanks, they will never find out from me.

Sure hope that will not be the end of the large checks.

We are back at it again.

Seems, I was correct, my headache claim is open to 1992.

Always,

Betty

[Josephine]

The reason for the three tellers was because it was a 6-figure check. They have to have strict accountability over that. They did the same thing when I picked up my $30K inheritence check a few years ago.

Thanks a bunch, Shane,

Where is the pictures of the new Truck?

Betty

[Josephine]

Retroactive is the term. It is retroactive compensation that you would have received.

It is protected bu the 38.CFR.13.111 it is not taxable.

§ 13.111 Claims of creditors.

top

Under 38 U.S.C. 5301(a), payments made to or on account of a beneficiary under any of the laws relating to veterans are exempt, either before or after receipt by the beneficiary, from the claims of creditors and State and local taxation. The fiduciary should invoke this defense where applicable. If the fiduciary does not do so, the Veterans Service Center Manager should refer the matter to the Regional Counsel for appropriate action.

[40 FR 54251, Nov. 21, 1975]

Thanks so much John for posting the regulations. These really come in handy in the search section.

I am always going to it.

Always,

Betty

[Josephine]

Rental is correct on the three teller rule, anytime that kind of money is moved or taken out of an account 3 tellers or a teller and the floor manager at the time need to sign off on it.

Funny story sort of: Years ago right about when I got back from Nam. My then steo father had an accident and he got a check from the insurance for ithink around $600 bucks to fix it. Well he goes to the bank the check was drawn on and the teller tells him she is going to have to have the manager sign off on the check He thought it was strange at the time but didn't say anything. She comes back after having sign by the branch manager no less. She begins to count out I think it was around $13,000 something and puts it in a sack and gives it to my step dad.

He comes out to the car were I was waiting and says come on lets go! He then says look and the money in the sack, well I looked and all the cold hard cash and said to him at the time what are you going to do? Well he said first lets get some beer then lets go get your mother.

He kept the money but the bank caught up to their mistake and he ended up having to pay back all the money above what the actual amount of the check was for!!

Tha is one of the reasons for the 3 teller rule but sometimes that does not work!!

Stillhere

Yes, the bank always catches up with you, but it sure is fun

when they make that mistake.

Thanks a bunch!

Betty

[rentalguy1]

Thanks a bunch, Shane,

Where is the pictures of the new Truck?

Betty

I'll take some after I sign the papers on it. i don't want to jinx the deal.

[carlie]

Seems to me like as long as the cash stays in the claimants name

there would never be the question of ANY tax (or other possible) problem.

jmho,

carlie

[JR Reihs]

Josephine,

Do not fret, your VA is non taxable, uncle george knows this as the bank deposit will show where it came from, yes the IRS was notified and they also know where it came from.

When you go to a bank and deposit 10k or more the bank will notify the IRS, this will give them grounds to start looking where this $$ came from if a pattern continues. I beleive this started during the early mob days during prohibition.

[Philip Rogers]

I believe that $10k figure has been lowered. My local bankers won't divulge the new amount as it appears to be "top secret," now.

pr

[Josephine]

Josephine,

Do not fret, your VA is non taxable, uncle george knows this as the bank deposit will show where it came from, yes the IRS was notified and they also know where it came from.

When you go to a bank and deposit 10k or more the bank will notify the IRS, this will give them grounds to start looking where this $$ came from if a pattern continues. I beleive this started during the early mob days during prohibition.

JR Reihs,

I am hoping the pattern will continue.

I am waiting to see what now they will do about the forgotten

unadjudicated claim back to 1992 for the headaches and the TDIU.

I am stepping in with a lawyer before my year is up to get rid of

that 10% rating for the first 5 years and the 30& and try to rid

myself of the 50%.

I should have been declared 70% with unemployable from 1992 to date.

Being that my NSC declares me unemployable to 1983 this is when they

should have declared the 100% rating.

I may be asking for a miracle.

I want to see where that denied due to excessive NSC Pension comes

into play. As I told Joey on the telephone, they may have denied

me due to excessive income, but not because they didn't declare

me unemployable due to the now service connected illness.

Thanks a bunch!

Betty

[otey2171]

I figure at todays low interest for savings accounts that $100,000.00 at 1% interest for 1 day comes up to about $2.74.

[halos2]

Betty,

We took out 40,000 in 1999 and got screwed by IRS and the state. The bank has to report it. Good friend took out 16,000 3 years ago and then 2 weeks later took out 10,000 and he got turned into IRS and the state by the bank and then the bank told him the 9999.99 law so he and we never did it again. My father in law took out 10,000 last july and the IRS and state sent him notifications to pay tax on his withdraw and he is 85 years old as disabled...was doing a loan to some con's and now is trying to locate the crooks but he had to pay over 800.00 in to IRS and more to the state.

Of coarse not being able to work since 2002 I wish I had any $$ now!

This was all cash not checks or certified funds from one bank to another. The problem was CASH, so you won't have a problem. You can put what you want, any amount in the bank but when you try to take the cash over 9999.99 in one 24 hr period that is when they report you.

quote name='Josephine' date='Jul 12 2008, 06:28 AM' post='98076']

Best to you and family and remember to never take out 10k at once from bank as they tell IRS and then you have a problem and have to pay taxes on the 10k!! (9999.99 is ok not reported but 10000. is. I mean that is in one day)

Picked this up from rentalguys success story.

I am a bit concerned:

I took the six figure 16 year retro and deposited it into my bank in my name and left it there for 24 hours and then went back to the bank and the teller wrote a authorized check for the full amount in my husbands name.

This he took and paid off the mortgage.

Does this mean that now I will have to pay taxes on this money,

for the amt would be more than I have.

Thanks,

Betty