tdiu IRS saying I owe them $$$

[rpowell01]

Received a letter today from the IRS and they are stating that since my students loans were discharge/foregiven I now owe them some $$$ because I didn't add the student loans discharge as income to my 2014 taxes. My student loans were discharged because I became too disabled to work and I was awarded TDIU retro back to July 2013.

What are my options? Should I go ahead and pay it or is there something like a benefit for disabled veterans so this should not be included as income?

 

 

[Joe Hillbilly]

Did you file a return for 2014?  If so, get an accountant to file a 1040X for all tax years including the 2013 tax year (also 2015 if you didn't find out about your rating until 2016).  You were disabled which allows for additional beneficial provisions.  I don't know your 2013 tax status but the offset could be enough to cover you.  Talk to a good accountant.

[armorer]

On 5/5/2016 at 1:00 PM, rpowell01 said:

Received a letter today from the IRS and they are stating that since my students loans were discharge/foregiven I now owe them some $$$ because I didn't add the student loans discharge as income to my 2014 taxes. My student loans were discharged because I became too disabled to work and I was awarded TDIU retro back to July 2013.

What are my options? Should I go ahead and pay it or is there something like a benefit for disabled veterans so this should not be included as income?

 

 

From earlier research, the VA Disability is the best way to go for getting rid of student debt with NO taxation. If I ever survive the VA with TBI, I will be doing that too. I am surprised no one knowledgeable with experience in 2 months has spoke up yet.

Either way, something is wrong. Even with SSDI, you can supposedly get out, but that is web-talk so I can't really say for sure. It is probably something that needs to be stipulated when the forbearance process takes place with the school loan authorities. Either the school loan authority or the VA did not do their due diligence.

Hopefully you have got it settled, but no, you should not owe 33% of your school loans when you are disabled permanently. Please post to tell us where you are at. It sounds like a government scam to me.

TALK to the School Loan authorities FIRST before you start spending money on professionals. They are actually quite nice and Veteran friendly.

Edited July 17, 2016 by armorer

[seminoles]

39 minutes ago, armorer said:

From earlier research, the VA Disability is the best way to go for getting rid of student debt with NO taxation. If I ever survive the VA with TBI, I will be doing that too. I am surprised no one knowledgeable with experience in 2 months has spoke up yet.

Either way, something is wrong. Even with SSDI, you can supposedly get out, but that is web-talk so I can't really say for sure. It is probably something that needs to be stipulated when the forbearance process takes place with the school loan authorities. Either the school loan authority or the VA did not do their due diligence.

Hopefully you have got it settled, but no, you should not owe 33% of your school loans when you are disabled permanently. Please post to tell us where you are at. It sounds like a government scam to me.

TALK to the School Loan authorities FIRST before you start spending money on professionals. They are actually quite nice and Veteran friendly.

The student loan discharge is considered income by the irs,  our cpa handled all the details when my was discharged and we did have a tax burden because of it. 

[armorer]

http://statesidelegal.org/student-loan-discharge-or-forgiveness-and-military-service

Even though I have not had any income to use him in several years, I have a great accountant. He may be the best there is, but I will do my homework first.

I don't have anything to worry about yet anyway. But I didn't have a thing to do with my injury except being a blind Patriot. And I had to pay to get it diagnosed myself after 34 years with a lifetime of pain and misery. With research and homework, hopefully it will just be a normal $450 yearly flat tax-return accounting-fee. I can see where it could be a variable repayment differences with a wide variance. But if it is on an income sliding scale, disability and injury income are non-taxable, so I'd think po' Vets have a bargaining advantage. Anything from VA Disability is NON-TAXABLE, lump sum or monthly.

The above link is from a highly credible VA resource and the most comprehensive breakdown I have seen yet; even if it is dated a couple of years.  Ymmv and probably will.

Edited July 18, 2016 by armorer

[seminoles]

I am married and my husband has taxable income and my ssdi is partially taxed most years because we exceed the limit for it not to be taxed, nice right?  but our cpa worked wonders to minimize the tax burden of my student loan discharge.  Not all cpas know what to do, and I had one that was a jackask and treated me like crap as if I had someone taken money from him.  UGH find a good cpa, and don't stress.

[armorer]

23 hours ago, seminoles said:

I am married and my husband has taxable income and my ssdi is partially taxed most years because we exceed the limit for it not to be taxed, nice right?  but our cpa worked wonders to minimize the tax burden of my student loan discharge.  Not all cpas know what to do, and I had one that was a jackask and treated me like crap as if I had someone taken money from him.  UGH find a good cpa, and don't stress.

Good point. I see how the school loan people work now. Instead of giving a 3 year deferment, they make you check in every 4 months. That way, they can catch you in the middle of other activities and off-guard. All you really have time to do is get a good accountant in many cases with all the other distractions. But for me, that's huge present value of money and will be next in importance to continuous income (which for me, is a rarest of all things.) 

Good cpa's are worth their weight in gold.