Q. I am a FERS retiree from the federal government in March 2011. I received the VERA/VSIP in a lump sum of $25,000 ($18,000 after taxes). In July, I withdrew a lump sum from my TSP to pay off my mortgage, that amount was also taxed. Since the lump sums I received were taxed already, how is it that I have to claim them as income? I am preparing my 2011 taxes and those lump-sum payments make it appear that I earned more than $100,000 in 2011. It seems to me that I am paying taxes twice on the money. Am I right? Would it have been more to my advantage if I had received the lump sums this year (2012)?
A. You were not taxed on the money before you received it. Money was withheld against your tax liability. You must claim the gross amounts as part of your income, which they are, and you will also receive credit for the withholding against your tax bill.
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I was forced out of airforce in 1992 and was paid SSB of $27,000. Called Special seperation bonus. After taxes i recieved $18,000. I file my 1992 taxes and paid another $2000.00. I recieved a VA disabiltly in 2008. They are taking my VA check to pay back the 27,000. including the $9000 in taxes. It seems unfair that i should pay back the $9000 in taxes. again. Any help in this??