[Shellback]

Can someone please explain to me why the IRS is allowed to collect twice on SSDI attorney fees? When I was awarded SSDI last year, my attorney was paid by the SSA. My attorney will have to pay taxes on the fee's he collected so why do I have to pay the IRS for the same fee's? Please excuse me if this doesn't make sense. My new pdoc is cutting back on my meds and I am going through withdrawals right now.

[Mz Migraine]

Originally Posted by Shellback

Can someone please explain to me why the IRS is allowed to collect twice on SSDI attorney fees? When I was awarded SSDI last year, my attorney was paid by the SSA. My attorney will have to pay taxes on the fee's he collected so why do I have to pay the IRS for the same fee's? Please excuse me if this doesn't make sense. My new pdoc is cutting back on my meds and I am going through withdrawals right now.

You don't. Who said that you did?

[bdh1]

Originally Posted by Shellback

Can someone please explain to me why the IRS is allowed to collect twice on SSDI attorney fees? When I was awarded SSDI last year, my attorney was paid by the SSA. My attorney will have to pay taxes on the fee's he collected so why do I have to pay the IRS for the same fee's? Please excuse me if this doesn't make sense. My new pdoc is cutting back on my meds and I am going through withdrawals right now.

Your backpay is your total award, including attorney fees, I think. If you over the exempt amout for taxes, you will pay on the excess.

[Shellback]

Originally Posted by Mz Migraine

You don't. Who said that you did?

I hope I am wrong but according to my SSA-1099 form, it counts as part of my taxable income.

[finz]

I don't remember on mine, as the accountant figured it all out, but I would think that you do have to pay taxes on the whole amount of your back pay award and then the attorney also pays taxes on his income.

Look at it like this......A company has to pay taxes based on their income and when they pay their employees, the employees have to pay taxes. (that's tax x 2)

Then the employee goes to Walmart and buys a large screen tv and pays a sales tax, then Walmart pays taxes on it's income. Then they pay their employees who still have to pay taxes.

The money is taxable each time it trades hands and is income for a new person.

I hope that makes it clearer

[echoes long ago]

do the long form 1040 and deduct the amount you paid your pawyer on the itemized deductions miscellaneous deductions section.

[kicker]

Not sure, my CPA brother does my taxes, not me, but depending on total income (mine is married, joint) a percentage of SS is tax-free. When you pay a lawyer for a service (fee) it becomes part of your lawyer's taxable income. His income is derived by fees given from others. Why would his income be tax free!

[Mz Migraine]

Originally Posted by Shellback

I hope I am wrong but according to my SSA-1099 form, it counts as part of my taxable income.

See this where I am confused. Why should you pay taxes on $$$ that you never received? You pay the IRS income that you received.

Example: Your SS back pay that you got in your hand was $30k. SS had already deducted AND paid your attorney his portion. Your attorney will be taxed for his/her portion.



Like the other poster indicated, fill out the long form (1040) & complete the itemized deduction form. Deduct the attorney fees.


Another thing to consider, did you elect to have the FEDS deduct taxes from your SSD check?

I sure as hell didn't.

[Shellback]

Originally Posted by Mz Migraine

See this where I am confused. Why should you pay taxes on $$$ that you never received? You pay the IRS income that you received.

Example: Your SS back pay that you got in your hand was $30k. SS had already deducted AND paid your attorney his portion. Your attorney will be taxed for his/her portion.



Like the other poster indicated, fill out the long form (1040) & complete the itemized deduction form. Deduct the attorney fees.


Another thing to consider, did you elect to have the FEDS deduct taxes from your SSD check?

I sure as hell didn't.

No, I didn't either.