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

[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.

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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