Answer Responses Below:
Next 3 Capt’s have requests. Can
anyone help them out on their issues then CC me your email response and I will
post in upcoming HL. Thanks.
From: Tal Fogg
Date: 9/29/2012 12:04:24 AM
Subject: 1040x from 2006
Mark, what updated info or
direction is available to someone who tried to get their 2007 tax return
refiled. I was told that I could refile the 2007 return on Monday April 18,
2011 because april 15 was a holiday. now the IRS says i filed late because
there was no holiday extension for the 2007 1040x refile 3 year window. Thx,
Tal Fogg jetjuice@aol.com
Sent from my iPhone
++++
From: Roger L. Edson
Date: 9/18/2012 12:51:51 AM
Subject: Loss of Medical Insurance, refund of previous with-holding
Gentlemen: I retired 10-01-96 from LAX,
MD-11A. I have received some emails and have read 'some' items on the High Life
about applying for these refunds but I am unclear as to what we are eliglble to
apply for. Could you please help me?
When we went through the process of the bankruptcy payment for loss of lifetime medical insurance it was determined by (someone) that my wife and I were eligible for a payment of $122,873.00. After discounting it down to the bankruptcy level, it was then determined that our payment would be $53,969.60. Out of that Delta withheld $13,447.64 for Federal Income tax, $3,346.11 for Social Security Tax (FICA, I believe), and $ 782.55 for Medicare Tax. Total with-holdings were $17,576.30. This left me with a deposit into Fidelity of $36,393.30, which I then rolled into an IRA account.
Which of the above amounts am I eligible to apply for a refund for? The Federal Income Tax? The Social Security (FICA) Tax? The Medicare Tax? Can you please help me with this?
I guess I need to get on the internet and try to download IRS Form 1040X for an amended return for 2007, possibly a form 'eight hundred and something' (843)?, maybe others? I have a letter from Robert L. Kight dated 2-13-08 with an attachment worksheet reflecting the above with-holdings, and a Social SEcurity Form 131 signed by a Delta Representative reflecting some of the above information.
I believe the $53,970. (rounded of to the nearest dollar) would have been included in my 2007 tax form 1040 and now that amount is reduced on the 1040X amended form?
Any details you can provide would be greatly appreciated.
My email address is: rle915@hotmail.com my postal mailing address is: 7003 McNatt Road, Aubrey, TX 76227 cell phone: 940-453-8590
Home phone: 940-440-9701
Thank you Roger Edson rle915@hotmail.com
When we went through the process of the bankruptcy payment for loss of lifetime medical insurance it was determined by (someone) that my wife and I were eligible for a payment of $122,873.00. After discounting it down to the bankruptcy level, it was then determined that our payment would be $53,969.60. Out of that Delta withheld $13,447.64 for Federal Income tax, $3,346.11 for Social Security Tax (FICA, I believe), and $ 782.55 for Medicare Tax. Total with-holdings were $17,576.30. This left me with a deposit into Fidelity of $36,393.30, which I then rolled into an IRA account.
Which of the above amounts am I eligible to apply for a refund for? The Federal Income Tax? The Social Security (FICA) Tax? The Medicare Tax? Can you please help me with this?
I guess I need to get on the internet and try to download IRS Form 1040X for an amended return for 2007, possibly a form 'eight hundred and something' (843)?, maybe others? I have a letter from Robert L. Kight dated 2-13-08 with an attachment worksheet reflecting the above with-holdings, and a Social SEcurity Form 131 signed by a Delta Representative reflecting some of the above information.
I believe the $53,970. (rounded of to the nearest dollar) would have been included in my 2007 tax form 1040 and now that amount is reduced on the 1040X amended form?
Any details you can provide would be greatly appreciated.
My email address is: rle915@hotmail.com my postal mailing address is: 7003 McNatt Road, Aubrey, TX 76227 cell phone: 940-453-8590
Home phone: 940-440-9701
Thank you Roger Edson rle915@hotmail.com
From: evan gost
Date: 9/30/2012 11:53:23 PM
Subject: your
post on PCN
Hi Roger-
I will attempt to answer your questions, but on the
condition that you recognize that I am not qualified to give tax advice and I
am not giving tax advice.
My opinions are as follows:
A number of pilots filed amended 2007 tax returns attempting
to recharacterize or delete the income relating to the bankrupcy payments. In
such cases, a Form 1040X had to be filed by April 15, 2011. Additionally, some
pilots filed a Form 843 in an attempt to recover FICA and Medicare taxes
withheld from the bankruptcy payments. Apparently some of the pilots were
successful in receiving refunds and many were not successful.
Because the amended tax returns for 2007 were due by April 15, 2011, the door is now closed for attempting to recover FICA and Medicare as well as attempting to recharacterize the income.
However, the FAA Modernization Act that was signed into law early this year allowed 90% of certain airline bankruptcy payments (90% of $53,969.60 in your case) to be contributed to a traditional IRA (by August 13, 2012) and the taxes paid on that settlement to be recovered in an amended return to be filed by April 15, 2013.
The FAA Modernization Act was specific in stating that FICA
and Medicare taxes still were applicable on the bankruptcy payments. Therefore,
there does not appear to be any reason to file form 843.
You indicated that you contributed to an IRA in 2007. If
that contribution was to Traditional IRA, the amount that you contributed to
that IRA may be eligible as an adjustment to your 2007 income by filing an
amended return (form 1043X) allowing you to recover the taxes that you paid on
that amount. However, if your contribution was made to a Roth IRA in 2007, you
would have been required to make a transfer from the Roth IRA to a Traditional
IRA by August 13, 2012, in order to take advantage of the legislation contained
in the FAA modernization act.
For your information, I contributed to a Roth IRA in 2007. I
decided not to take advantage of the new legislation and simply continue
to hold the funds in the Roth IRA. If I had transferred the funds to a
Traditional IRA, I would have received a tax refund; however, I would have
given up the tax advantage of the Roth IRA going forward and would have
incurred taxes on withdrawals from the Traditional IRA.
It would be prudent for you to seek the advice of a tax
professional in determining how to proceed.
Ev
++++
From: RetDalCapt@aol.com
Date: 9/17/2012 12:01:31 PM
To:
Subject: FAA Modernization Reform Act of 2012...
Gene:
I Googled FAA Modernization Reform act of 2012
and could not find Section 1106. On pages 152-154 I found nothing regarding
medical insurance settlements.
Can you tell me where I can find information
regarding the treatment of medical insurance settlement as wages?
I have already been denied through appeal on
both the 843 and 1040X . So I am just trying to determine if I have any reason
to refile an appeal.
I appreciate you willingness to share your
information.
Thanks
Response:
From: Stevemd11@aol.com
Date: 9/30/2012 9:44:10 PM
Subject: Public
Law 112-95
Hi Dick,
Google "Public Law 112-95 in text".
you should get Modernization Reform Act of 2012. Go to Sec 1106 which starts on
P.152 but that page primarily has to do with IRA's. Go to part "C
Definition and Special Rules" on P.153 and continue on P.154. I know this
is frustrating but hope it helps.
Steve Svoboda
++++
From: Frank T. McKee
Date: 9/16/2012 10:16:16 PM
Subject: 2007 tax
refunds
Glad some are getting the deserved refund-mine was
denied, denied, denied and the last letter (they have all come from different
IRS offices) threatened me with a $5000 fine for "frivolous" tax
return filing if I persisted !!
Frank McKee
Ret Capt L1011
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Editor: Can someone help Mary out with her tax question?
From: Mary's Email
Date: 9/22/2012 1:04:15 PM
Subject: 1099-R form
To whom this may concern,
When I changed tax accountants this
year. He noticed on the 1099-R form it listed my gross distribution in box # 1.
However, Delta left box. # 2a blank (taxable amt,) 2b tax amt. not determined
and box # 7-4 ( which is appropriate.)
I receive these benefits as
survivor from the D& S Trust. My husband was a Wal/Dal Pilot.
Prior Michael's passing, (
10,02,05), his W-2 were always correct.
I've checked all past returns and
box 2a has been blank. My previous accountant listed it as income.
I've contact DESC several times and
have received the same form letter which is very ambitious.
Do you have an answer for this?
Would appreciate any information
you can give me.
Thank you for your time.
Mary Oneal, Wife of, J. Michael
Oneal
Response:
From: egost@hotmail.com
To: mwoneal2@gmail.com
Subject: taxation of D&S Plan benefits
Date: Sun, 30 Sep 2012 18:53:59 -0700
To: mwoneal2@gmail.com
Subject: taxation of D&S Plan benefits
Date: Sun, 30 Sep 2012 18:53:59 -0700
Mary-
I do not know why Delta does not make an entry in box 2a of the form 1099.
All indications from Delta are that the survivor's benefit income is taxable because Delta funded the D&S Plan.
Ev Gost
Vice Chairman
Delta Disabled Pilots and Survirors Association (DDPSA)
www.ddpsa.org
I do not know why Delta does not make an entry in box 2a of the form 1099.
All indications from Delta are that the survivor's benefit income is taxable because Delta funded the D&S Plan.
Ev Gost
Vice Chairman
Delta Disabled Pilots and Survirors Association (DDPSA)
www.ddpsa.org
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
From: <ralph428@centurytel.net>
Date: Sep 26, 2012 1:51 PM
Subject: 2007 Tax Period - Wages
To: "Mark Sztanyo" <misc@pilotcommunication.net>
Mark,
After the IRS Final Letter of Denial was received in 2011, the letter stated that you had two years to appeal, from the date of the letter.
I have read recent reports in the PCN regarding the IRS moving on the refunding of taxes because of the "FAA Modernization and Reform Act of 2012." This appears to apply only to those who "undo" and re-deposit into a Regular IRA.
What about pilots who rolled the funds directly into a Roth IRA in 2009. Has anyone made any progress on getting back any monies from the IRS for the Excess FICA/Medicare Tax, after depositing it into a Roth and keeping it in that vehicle?
Any recent "good news" in that area?
I continue to enjoy all of your "Posts" and information. Thanks.
Regards,
Ralph Wolken
MD-11 1996
Date: Sep 26, 2012 1:51 PM
Subject: 2007 Tax Period - Wages
To: "Mark Sztanyo" <misc@pilotcommunication.net>
Mark,
After the IRS Final Letter of Denial was received in 2011, the letter stated that you had two years to appeal, from the date of the letter.
I have read recent reports in the PCN regarding the IRS moving on the refunding of taxes because of the "FAA Modernization and Reform Act of 2012." This appears to apply only to those who "undo" and re-deposit into a Regular IRA.
What about pilots who rolled the funds directly into a Roth IRA in 2009. Has anyone made any progress on getting back any monies from the IRS for the Excess FICA/Medicare Tax, after depositing it into a Roth and keeping it in that vehicle?
Any recent "good news" in that area?
I continue to enjoy all of your "Posts" and information. Thanks.
Regards,
Ralph Wolken
MD-11 1996
Editor: Ralph, I believe Ev addresses
this issue above and check this section and future posts in the Finance
section: http://pcnhighlife.blogspot.com/search/label/B.%20Finance
for additional info on the subject of your question.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Full post disclaimer in left column. PCN Home Page is located at: http://pcn.homestead.com/home01.html
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