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Veteran Services: Finance Questions

Finances

You're working, and you've got a family that depends on you - both now and down the road. Where do you invest your money? Do you borrow against the equity in your house? Through a preferred provider relationship with USAA, The American Legion can provide expert financial advice to just about any question.

Questions & Answers

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Debt - Education - Estate Planning - General - Investing
Real Estate - Retirement - Small Business - Taxes

Taxes

I received almost $30,000 back pay from VA for combat-related disability. Do I need to include this when I file my income taxes? I’m interested in income tax, not property tax. -James

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Is social Security disability taxable? In other words, does it have to be claimed on federal income tax? -Tom

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My wife and I live on limited income from Social Security and a part time job. Social Security was $16,000 and part-time income was $6,000 (no federal tax withheld). Must we file, and if so, how? Numbers are rounded and no deductions. Thank you. -Ross

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How do I deduct long term care policy cost on tax forms? -Tyrus

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When do you start paying taxes on Social Security benefits? And when are you responsible for having to return Social Security money? -Andy

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My wife and I are both on Social Security with combined yearly checks totaling $30,828. I also receive a small pension from a previous job of $308 per month, as well as $500 per month from a part time job. I would like to know what my tax liability would be. My wife took early Social Security and is 62. I as well took early Social Security but will turn 66 in seven months. Please let me know, thank you. -Albert

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For tax year 2011, it was possible to make a non-taxable QCD. Is this provision available for tax year 2012? -George

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At what point does Social Security become classified as income and become taxable? -Larry

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I received almost $30,000 in back pay for combat-related disability from VA last year. Do I need to report this when I file taxes?

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Do we have to pay taxes on our Social Security with income over $32,000, including half of our Social Security? -Margie

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My wife and I are retired. I received military retention pay and both of us receive Social Security benefits monthly. I returned to work in 2011 and received taxable wages of about $80,000. Will I/we be taxed on the working wage if we file combined and if so, what would be an estimated percentage? -Steve

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I was laid off in 2009 and 2010, and I have 2009- -2011 taxes to do very soon, and I can’t afford to pay the tax companies the amount they want. My return has to be itemized so there may be two or three different forms. Who in Orange County, Calif., can do this for me? Please reply ASAP. Thank You. - Vince

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My mother-in-law and her four daughters were on a deed for the house where my mother-in-law lived. She passed away three years ago, and we finally got rid of the house for $20,000. Each daughter was given a 1099-S for $5,000. The sale went through a realtor. What are we allowed to deduct from this $5,000? I would appreciate any advice you can pass along. Thank you. - Fran

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My father left an annuity to me. I have in my hands a check in the amount of the death benefit from it. I do not want to pay taxes on this. What can I do to avoid or defer taxes? – Steve

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I’m retired, and my income is from a pension and Social Security, from which I take standard deductions for federal income tax. My wife draws workers compensation as her only source of income. Is the workers compensation income tax free? – H.T.

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What is the downside to the file and suspend strategy? –Ann

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I receive SSDI and 100 percent VA disability. Do I have to pay taxes? –Michael

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Can a nonprofit organization such as the Legion, have employees and only use a 1099 or do they have to be taxed? – Christy

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My birthday is 1 July 1941. Will I become 70 1/2 on Dec 31, 2011, and be required to begin minimum withdrawals from Traditional IRA in 2011; or will I become 70 1/2 on Jan 1, 2012, and not have to begin withdrawals until 2012? – Robert

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I thought there were no tax deductions for Roth IRA contributions until I saw the IRS Form 8880. Can you take a deduction for a Roth IRA contribution under certain circumstances?

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We have money in Mutual Funds from a rollover of my 401K. I am 67, and we are planning to purchase a home after renting for 10 years. Is there any way to keep from paying high taxes on the money when we withdraw it to make a down payment on a home? – Lorr

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I am 68 and married with joint annual income of $55,000 in retirement annuities and have a large IRA savings. What should I do to limit the tax burden concerning the IRA? – Darwin

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I have been offered a settlement from my long term disability insurer. Is it a good idea to settle? What are the tax issues? What amount by percentage from the total would be a reasonable settlement? – David

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I am on Social Security now, and still working. Where does all that SS [contribution] that is deducted from my check every week go? Not to me. Is there a way to exempt out of SS, since I am receiving it now? – Michael

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Is Social Security disability taxable or exempt? – Ralph

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I received an advertisement in the mail about recent congressional legislation which provides benefits for seniors Is there some truth about recent legislation favorable to seniors, and if so, who at USAA should I contact for more information? – Tim

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My wife and I have been retired for about 18 months, and I forgot to stop my auto contributions to our IRAs for 2009. What do I need to do to correct this as far as the IRS is concerned when I file my taxes? – John

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