Dear Soccertese,

About your TAX returns. There is a statute of limitations on getting any refunds due you and it is 3 years. However, if you OWE, there is no limit of time. You would be required to pay any and all taxes for any and all years late. Even if you did not owe FEDERAL INCOME TAX, if you earned a net of over $400 in self-employment, you would still owe Social Security and Medicare tax on it.

Are you saying that you had less than $400 net income from your self-employment during the years that you were late filing your returns?

It is very surprising for a disability law firm to accept any claimant that did not meet the eligibility requirements of being insured under the Social Security system.

It is situations where DLI (Date last insured) and Date of Onset create problems with qualifying for eligibility and some decisions must be made as to which dates to use as the date of onset.

As far as "accepting" your tax return information. If you PAID Social Security taxes, it is my belief that the returns MUST be accepted if filed. Your payments may not simply be ignored. As far as the IRS, they do not have to provide any "refunds" on returns filed beyond 3 years after they are due. Any refunds due you are forfeited.

Hopeless

Dear Soccertese,

I am always forgetting to write something and have to make additional post. Sorry.

How the SSA gets earning information........ If you are employed and receive a W-2, the employer files that information directly with the Social Security Administration each year. This does not go through the IRS but directly to the SSA. If you are self-employed, there is NO W-2 and the only place your earnings show up is on Schedule C of your 1040 form. This is when you have to rely upon the IRS to furnish the information to SSA.

If you have incorporated as a sub-chapter S corporation, you would be paying yourself a salary from the corporation and preparing a W-2 so I am assuming from your post that you are NOT and that your information is being reported on Schedule C of your 1040.

The IRS accepts your returns when filed late, they just will not provide any refunds beyond the 3 year limitation as I stated previously. I will do some research to see if there is any regulation in SSA rules that prohibit you from using any payments made for FICA and Medicare when reported late.

Did you pay any self employment taxes (social security and medicare) on the income you earned during the years that you were late filing your returns? If you forfeited refunds, I can only assume that you made estimated tax payments for unearned income that was mentioned regarding your Schedule D.

Keep in mind that SSA only cares about EARNED income, not UNEARNED income. It is only what is reported on Schedule C and Schedule SE that concern SSA. They do not care what your AGI was on your 1040 form. I should qualify that with "when looking at disability requirements". Your AGI may be considered for benefits that are means tested like supplemental income.

all my income was via a sole proprietor business and on a SE form. btw, thanks for your responses, always amazed at the kindness of strangers on these boards!
i didn't file 2008,2009,2010,2011 returns until 2013 but actually overpaid my estimated taxes in each year they were due which was all 4 years so there was no penalty, SOCIAL SECURITY still wouldn't accept the wages i earned in any of those years except 2011. I had filed late returns before, always paid enough taxes but they were all within 3 years so i guess having filed late returns before made me think it was no big deal since i had paid the taxes on time.
as an aside, i found out from IRS that it takes 12 months now to get their numbers over to SS if you file a late return. dealing with the IRS over these late returns was a nightmare, admittedly my fault for filing so late. they sent me a letter stating i owed quite a bit of money based on stock sales from my 1099'S. Since i hadn't filed a SCHEDULE-D stating the cost basis of my stocks, they assumed 100% profit on each trade. This got my attention to say the least. To make a long story short, i had a deadline to get my returns to them which turned out to be 30 days. I sent my returns to them certified mail and go proof of receipt. called them a week later, they had no record of receiving the returns. called 2 weeks, no returns, was told it could take 6 weeks to register them, past the 30days. i was told not to worry, as long as they received them on time i had nothing to worry about. talk about something to worry about. i actually took copies down to the local IRS office and asked them to stamp one to send to their FRESNO office and stamp one for me to keep so i could prove they got them within 30 days. so they got them in time. you never talk to the same person twice and get different answers. lesson here is get your returns in on time.

Medicated vs not medicated isn't an issue regarding SSDI/SSI.

If only non medicated was acceptable for a worker, no one with diabetes, high blood pressure, or any other condition that required medication to control symptoms could ever work.

The use of pain meds for those of us with pain issues can be a bit trickier, in terms of some specific jobs, say a bus driver, might preclude you from being able to take certain medications while doing THAT job, but even that wouldn't preclude one from being able to do ANY job.

A factor in working while on pain meds, or ANY meds, is that the side effects might then limit the ability to do the needed work. Many on adequate doses of pain meds might then be able to manage their pain, but might have such issues with dizziness, nausea, or fatigue that they would be unable to work because of those symptoms.

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Soccertese,

I'm sorry to hear of your health issues and inability to work.

I'm glad that Janke saw your post and addressed the obvious concerns about your date last insured. If the medical evidence that is documented doesn't support total disability before 12/31/12, it sounds like it's SSI or getting the IRS to communicate that you did work more to convince the SSA to adjust your last date of insurability.

Best wishes getting through this difficult process.

Do not beat yourself up on being late. Believe me, you are not the first person to be late filing returns. I had someone come to me with 10 years to file. It is sad when the tax client losses their rightful refunds when late and the usual reason is because the tax laws are so complicated that it becomes too overwhelming for the taxpayer and the returns get put on hold. I have found that the self-employed are usually the ones that are late more often than others. For one reason, they are so busy trying to earn a living that often the bookkeeping is postponed, then trying to put it all together combined with complicated tax laws is so time consuming that they postpone it while they attempt to earn a living. Next thing, a year has passed, then you have to file the OLD year before you can file the new one due and the cycle begins. It is when they, like you, get those IRS notices, that they knock on my door begging for assistance.

If you PAID self-employment taxes and have your SE schedules to prove it, I really believe that SSA will have to accept your earnings and give you the credits you earned. It may take some time for the record to be updated.

I am much more versed in tax laws and regulations than SS, so I will look into it, but I really do not think your earnings can be ignored if you paid self-employment taxes on them. It may just be a matter of getting it into the record.

One other concern is the "amount" of your earnings. Were they enough to earn the full 4 credits each year? Even if they were low earnings, you may have earned 3 credits for a particular year. Every credit earned toward the requirements counts. I am not asking for your earnings. I would not want you to disclose that kind of information on an open forum.

And yes, I have often seen IRS use 100% basis since they do not have a return to indicate otherwise, all they know is what is on 1099 B.

If I can be of any help, just let me know. Best of luck to you. You may not get your refunds but I do think you should be entitled to an updated SSA record of earnings. It may just be a matter of time getting them into your record. You may meet the eligibility requirements once that is done. You can look at your returns and calculate it for yourself and see if you will be eligible to continue with your disability claim.

Are you still attempting any work with a reduction of hours due to your impairment? Other posters are correct that you are not considered disabled if you are capable of "gainful" work when medicated. If medication precludes your ability to work, and your work can not be accomplished if not on the medication, then you may be considered a candidate for disability.

I have known SSA to go back 30 years for missing income when computing disability benefits if they think the earnings record is missing any earned income. Many women in the workforce may have no earnings for one year on their SSA earnings record when they took off for having a child. SSA will ask them if NO earnings for a long ago year is accurate in order to properly calculate their disability benefits.

I also think you need to check with your attorney to see if he/she can find any obscure legal provision that would allow you to correct your earnings record with these tax returns (because you did pay estimated taxes) and if the lawyers' office doesn't understand your question, it is time to find a new lawyer. If you can succeed at that, it will push your date last insured to a more recent or future date so your current medical condition and current medical evidence will then be material. Right now, all SSA can use is the medical evidence before your date last insured, 12/31/12.

About your question about medicated or not. Many people have conditions that are kept under control with medication. If the condition can be controlled with medication without side effects that are severely limiting, then SSA will probably not find you disabled.

Again, your attorney should be answering these questions now rather than waiting until the hours before a hearing. You might decide that you will continue to take the medication that allows you to work and keep working (and filing timely tax returns) and wait until your condition becomes worse before filing.

Also, since you mentioned your 1099's from stock sales, I will make the assumption that you would not qualify for the low income SSI program because of the value of your assets. So with DLI in the past and excess resources for SSI, you won't qualify for anything, regardless of how ill or disabled you are.

removed my reply, shouldn't have posted income amounts

Just to clarify, attorneys as well as non-attorney reps are regulated by law on SSDI/SSI claims payment and are limited to a percentage of backpay and a max dollar amount.

You have 4 credits for each year of 2008 2009. Even if the more recent years from 2010 through 2013 are "negligible", if about $1000, in any one year, you could have earned at least one credit. I would have to check the exact amounts to earn a credit for those particular years but I think it is around $1000 per credit.

You only have 60 days to appeal so I would ask your representative to calculate your credits based on your tax returns and determine if you will qualify by having sufficient credits. That is the FIRST hurdle to conquer. Everything else is a mute point if you are not insured under SSA.

Trying to look at the bright side, you are nearing early retirement age, so that might be something to consider if disability benefits are not an option. Medicare coverage is not far off in your future either because of your age. Trying to make ends meet from now until you are 62 if disability benefits are not in your future may mean that you will need to continue to earn whatever you can under your circumstances and at your own pace. If you could earn about $4000 per year over the next few years, you would meet the credits needed, maybe have more medical documentation, and be able to file a new claim. Disability benefits revert to retirement upon reaching full retirement age but you could still file for disability until then. Based on your current age, I am guessing full retirement for you would be between 66 and 67. I don't have the chart in front of me.

Do you have enough credits (40) for "retirement" at 62? That may be your best option if you do not have the needed credits for disability and are unable to earn more credits between now and age 62.

Good luck to you.

One other comment about disability...... just because you may not be able to do your former work, or same type of work without additional training, you could be found to be able to do "other" work that does not require training and is something you would be capable of with your condition. If you can type at a computer, have worked from home, they may find that you are still capable of gainful work. I am not saying that you are, I am saying that is a possible outcome on your disability claim. If you find that you can continue to pursue your disability claim having earned the appropriate amount of credits, be sure to check out some of the disability info on the stickies here and info on the internet under disability secrets.

Earn anything you can and are capable of if possible to get the credits you will need if you want to apply for disability later under a new claim in future year. Just my opinion. If you can not earn anything any longer, consider taking early retirement at 62.

First check out your true credits based on your tax returns. Talk with your attorney.

soccertese,

SS determines disability based upon a person's ability to work at or above (or even near in reality) the SGA level. What is this? Significant Gainful Activity is a dollar amount set by SS. In 2013 it was $1040. If your hourly rate is high enough, you don't have to work many hours to be disqualified.

Research the "grid rules" though. There are concessions made for workers ages 50 and 55, so if you can prove you were eligible this may help.

I'm not trying to discourage you, btw. You just DON"T want to focus on proving something that is irrelevant to SS.