tax screw up

[FLA]

I have always done my own taxes, head of household, long form, appropriate deductions, never ever an issue since getting divorced over a decade ago.

This year, I have been disabled the entire year except for 2 days of attempted work. This is where it gets bad. Part of my disability affects memory, comprehension of complex things, etc. So I do not even remember if taxes were taken out of my employer's short term disability and for some reason, I kept not a single pay stub. So unlike me. I have always been fine with record keeping, so this mess is really getting to me.

Then I got long term disability starting in July and knew taxes were not withheld. I planned to ask them to withhold taxes. I would remember this, not write it down, would forget it again and then remember it again and welp, it's now Dec and I just remembered again.

So I will get a big penalty from the IRS if both of these disability plans did not withhold taxes, correct? I've been given advice to pay some taxes now to try to alleviate the penalty. I am not sure if that is sound advice this late in the year. I can find out tomorrow if the short term had taxes withheld, part of me thinks they were.

As for the LTD, I think I will earn approx $17,500. Anyone know how bad the penalty will be for not paying taxes in a timely manner on roughly this amount?

I do have 18k in the emergency fund allotted for unforeseen medical expenses and legal bills dealing with the ex that I can use to pay the penalty and back taxes. But I will need, I would guess, at least half that money. I also have to calculate if my medical expenses meet the % necessary on the tax form. I no longer have a mortgage so if my medical expenses aren't enough, I may be filing the short form.

any advice appreciated!

[Singuy]

According to the tax law, you will not be penalized for the tax year you were disabled. If you do own back taxes, it is at an interest rate of 3%/year + 0.5%/month.

https://www.taxact.com/tax-information/tax-topics/how-irs-interest-rates-work.asp

https://www.irs.gov/publications/p505/ch04.html

[FLA]

According to the tax law, you will not be penalized for the tax year you were disabled. If you do own back taxes, it is at an interest rate of 3%/year + 0.5%/month.

https://www.taxact.com/tax-information/tax-topics/how-irs-interest-rates-work.asp

https://www.irs.gov/publications/p505/ch04.html

very, very much appreciated, thank you!

[FLA]

if your brain was a little wonky and failed to remember to file that tax withholding form for 5 months, would it probably be best to maybe have a professional due my taxes? I hate that idea, but between trying to get the penalty waived and having to figure out all my medical expenses, and the fear that I will totally just make blatant errors I've never made before, maybe it's for the best.

H and R Block? a private CPA? or just have a non-addled adult check my work? they have the option of leaving the penalty line blank and the IRS will figure out what you owe. Anyone ever done that?

I just want the 1099s or w2s to come now so I can rip off the bandaid

[snafu]

1st, check with HR to verify if your disability income is taxable. I know we are different cuntry, different rules but we do not pay income tax on most disability income programs as they are termed 'insurance.' They are viewed in the same vein as auto insurance payout or home damage insurance pay-out.

D you have someone you trust who is familiar with the rules/requirements for medical expenses and 'other' income like disability? You might start by running the figures yourself on an electronic program. It's important to have 'skin in the game,' but smart to have it checked and verified until you regain confidence.

I hope it's ok to suggest you use either a written or electronic day timer to track all tasks and events. I'm taking medication that makes me feel 'spacey' and although I've done the same tasks on the same day of the week for years, it's been helpful to have a daily 'To Do' list. I check it several times a day and don't let my day end without fulfilling all I listed!

[FLA]

I did start using iCalendar. I've used the Notes program for years and kept long lists of batches of related to-dos, i.e.: Important Financial tasks. That's worked since I got my first Mac, over a decade ago.

While it's nice I can write everything in detail there, I lost the habit of checking and actually tackling my to-dos. If they were the least bit "difficult", I would say, "ok, tomorrow I will absolutely, positively take care of that," and promptly forget. Like my brain could deal with some complicated stuff, for instance, keeping track of every MD appt and getting the doc's notes so when I have to show why I am still disabled to the long term disability folks, I have every piece of documentation possible to give them. And I think I've called and gotten all the lists of medical expenses paid out. But other tasks seemed especially hard even when they weren't- like sending in the tax withholding form. It would get punted, linger on a list, occasionally checked and for whatever reason, just never got done.

I am absolutely, positively mailing in that withholding form today so it's in place for 1/1/16 and I will not have this mess next year. I can set alerts on iCalendar so I'm going to take things from the to-do lists that are crucial, assign them a date to be done by and set an alert. And then I will remember to check Notes to see all that I have written about what needs to be done to complete the task.

thankfully, taxes are the only big mistake I've made, at least that I know of. I have stayed on top of bills, the bill paying system seems to be working. The medication system works and is dummy-proof.

I guess the lesson learned is there has to be a fool-proof system with hard and fast rules about when something must be done by. No more "I'm foggy today, will deal with this tomorrow," because I will be foggy the next day so buck up and do it.

[FLA]

I did start using iCalendar. I've used the Notes program for years and kept long lists of batches of related to-dos, i.e.: Important Financial tasks. That's worked since I got my first Mac, over a decade ago.

While it's nice I can write everything in detail there, I lost the habit of checking and actually tackling my to-dos. If they were the least bit "difficult", I would say, "ok, tomorrow I will absolutely, positively take care of that," and promptly forget. Like my brain could deal with some complicated stuff, for instance, getting every doc's notes so when I have to show why I am still disabled to the long term disability folks, I have every piece of documentation possible to give them. But other tasks seemed especially hard even when they weren't- like sending in the tax withholding form. It would get punted, linger on a list, occasionally checked and for whatever reason, just never got done.

I am absolutely, positively mailing in that withholding form today so it's in place for 1/1/16 and I will not have this mess next year. I can set alerts on iCalendar so I'm going to take things from the to-do lists that are crucial, assign them a date to be done by and set an alert. And then I will remember to check Notes to see all that I have written about what needs to be done to complete the task.

thankfully, taxes are the only big mistake I've made, at least that I know of. I have stayed on top of bills, the system seems to be working. The medication system works and is dummy-proof.

I guess the lesson learned is there has to be a fool-proof system with hard and fast rules about when something must be done by. No more "I'm foggy today, will deal with this tomorrow," because I will be foggy the next day so buck up and do it.

xxxxx

[disneysteve]

if your brain was a little wonky and failed to remember to file that tax withholding form for 5 months, would it probably be best to maybe have a professional due my taxes?

H and R Block? a private CPA?

I think getting professional help is an excellent idea. You probably have more than enough on your plate and don't need the stress and worry about whether or not you're doing your taxes correctly. You also want to make sure you're getting every possible break that you're eligible for.

Personally, I'd avoid H&R Block. I know too many people who went through the minimal training to do seasonal tax work for them and these are folks that I absolutely would not trust to handle my affairs. Get yourself a professional, someone who actually does this for a living, not just a couple of months out of the year.

[MonkeyMama]

A few thoughts:

It's unlikely that the disability insurance is even taxable. I would verify this before I start withholding taxes.

It's unlikely you have enough tax owing to be penalized. I am going off the $17,500 figure; not sure how much you made otherwise. & yes definitely just let the IRS figure the penalty and bill you (if there is a penalty).

There is nothing magical about hiring someone to take care of your taxes. I am a tax professional, and I don't see why you wouldn't just delay or forget filing your taxes. Plus you should be able to file your taxes for free and I don't see wasting that kind of money. Do you have a relative or friend that you can charge with the task of helping you get your taxes filed on time?

[FLA]

A few thoughts:

It's unlikely that the disability insurance is even taxable. I would verify this before I start withholding taxes.

It's unlikely you have enough tax owing to be penalized. I am going off the $17,500 figure; not sure how much you made otherwise. & yes definitely just let the IRS figure the penalty and bill you (if there is a penalty).

There is nothing magical about hiring someone to take care of your taxes. I am a tax professional, and I don't see why you wouldn't just delay or forget filing your taxes. Plus you should be able to file your taxes for free and I don't see wasting that kind of money. Do you have a relative or friend that you can charge with the task of helping you get your taxes filed on time?

the long term disability is taxable, that was made clear, I screwed up and had nothing withheld. I won't forget to do my taxes, I always do them the week I get all the W2s and 1099s.

I'm afraid I'll screw up the medical deductions, whether I will have a high enough percentage to claim them. And I am worried about getting the waiver of penalty request done correctly.

maybe I will just do them on my own and see how it goes, then I will have plenty of time left to see a professional if need be. People owe taxes all the time, IDK why I am such a head case over this. I think it's the not knowing what I will owe.

[Petunia 100]

Read this and set your mind at ease about the penalty:

https://www.irs.gov/taxtopics/tc306.html

[FLA]

Read this and set your mind at ease about the penalty:

https://www.irs.gov/taxtopics/tc306.html

thank you!

[FLA]

I just got my library newsletter and the free yearly tax preparation help is no longer just for the elderly, they got a grant from the United Way. I will be the first person calling when they open up those appointments.

So I can do everything myself first, have them check it and give input and if that still doesn't feel like enough, then I will consider paying someone. But with the library's help, I think I'll be ok.

[FLA]

Well, I meet with a NYS Marketplace Insurance Plan Navigator on Monday and they need tons of documents, so I finally tackled my mess. I figured I earned about 40k in short term, long term and a voluntary short term policy I bought. My healthcare expenses were over $6k. I put my income in a turbo tax calculator (did not include the 6k medical because it would not let me) and my tax bill is supposed to be about 3800k. Doesn't that seem really, really low?

I have now stashed away 20k, having gotten my last disability check for the year and finding a check I never cashed. So if that tax amount is anywhere near accurate, I feel a lot better. I should have enough left to pay lawyer bills from issue with ex and unexpected medical costs. My parent floated me on groceries and taxes. I've since taken over groceries, the energy bill and cable bill to help pay back what I received. I'm waiting to see where I land in terms of paying back the taxes just yet.

Next year, if LTD does not drop me, I should get 36k, I WILL pay my taxes on it and will aim to save half of it again in case they do drop me before SSDI kicks in, which I will not know if I will receive it until Feb 2017.