We were told we couldn’t make an appointment, that we had to walk in. We’re a bit irked over the whole situation, but it looks like we’re between a rock and a hard place. Ivylad is on some heavy duty meds and I don’t know if he asked the disability attorney and forgot the answer or didn’t ask in the first place.
Sigh. Thanks everyone, for your insight. I really appreciate it!
I may be wrong about this, but I believe that the amount on your SSA-1099 is the gross amount before deducting your attorney’s fees. You may be able to claim a deduction for the attorney’s fees (as well as the accountant’s fees). It is a miscellaneous itemized deduction subject to the 2% of AGI floor. That means, in order to deduct the fees, the total of all of your miscellaneous deductions have to exceed 2% of your AGI and the total amount of all of your allowable deductions must exceed your standard deduction.
If your CPA thought that the benefits were not taxable, he might not have claimed this deduction on your return. (He might also not have claimed it because your deductions did not exceed the 2% floor or the standard deduction.) If you let the IRS figure your taxes for you, they definitely did not deduct it. So check with your CPA.
Incidentally, if you paid any CPA or lawyer’s fees for personal matters in 2018 or later, they would not be deductible at all. The new tax law eliminated ALL non-business miscellaneous deductions that were subject to the 2% floor.
By the way, here is an article that I believe explains what is going on. You’ve kind of got to concentrate to follow all the twists and turns, but I hope it helps.
Also, check to see if your CPA considered using the special lump-sum election that is available for Social Security Benefits (IRC § 86(e)). This does not help everyone. Your CPA may not have considered it if he thought that the SSA-1099 was in error and everything would resolve itself. Or he may not have considered it because it didn’t help you. But it could possibly reduce your tax. Since it is an optional election, the IRS would NOT have considered it when it calculated how much you owe.
See Publication 915, the section titled “Lump-sum Election.”