HELP! I think I made a huge mistake on last year's taxes O_O

amother

Mon, Apr 14 2014, 2:05 am

I consider myself - and generally am - very scrupulous about reporting income accurately. It's especially important to us because in addition to taxes we are also on Medicaid and food stamps due to legitimately, on the books low income.

But while preparing this year's tax return, I'm looking through last year's and I can't find DH's kollel checks reported on there! Could be I'm just up way too late at night and missing something (like some screws in my brain, or my marbles) but it really really looks like that was never reported. It's around $7000!

OMG I feel like I am going to be in such deep trouble now, and with no wrong intentions! I think it might have happened because I was using Turbo Tax and I remember they changed something about the program that made it harder to figure out where to enter that. Could I have completely forgotten to go back and figure it out? I'm so worried because there was another thread about someone who had to pay back medicaid for a fortune... OMG if that happens to me I might have to die. I can't believe this is happening.

Should I try to fix it with the IRS AND the medicaid people who are impossible to talk to AND the food stamp people who are also difficult, not to mention that if they decide we shouldn't have had the benefits last year we will be in such a hole!!! (we would probably still have qualified but not as much)

OMG. I don't even know who to talk to. Is there any accountant who helps people with these kind of stupid situations? Do I need a lawyer? I am just flipping out, beside myself over this.

HEEEELLLLLLP!

amother

Mon, Apr 14 2014, 2:33 am

OP here, and according to everyone I've ever asked it is money that comes into your bank account and pays your expenses, it's income. It was an error that it didn't make it into my return last year. I figured out how to do it this year and am now worried what will happen if they notice I skipped a year or if Medicaid or food stamps ever finds out. It is not even a question that I will report it this year, it is yashrus. But I just am terrified about last year's oversight.

Regarding the taxes, interestingly entering it doesn't seem to have made a difference in the total amount of taxes. The little refund calculator at the top of the screen did not change at all after I entered it, even though it is totally taxable.

Our AGI from last year would still have been well within the MA and FS limits, but I'm not sure about the total unadjusted income which is what I think they really count.

I am SO getting an accountant for next year to get my record keeping in shape. I mean now, not next tax season. I used to be so on top of everything but as family grows, expenses grow, you look for more income sources, at this point in addition to juggling more family and work responsibilities my accounting has also become all tangled up because now I'm keeping track of about 3 businesses, plus more people's medical and education expenses, etc etc... I used to consider myself organized but I'm not THAT good.

AAAAAAAHHHHHHHHHH.

grace413

Mon, Apr 14 2014, 2:44 am

amother wrote:

According to many you don't report kollel checks as income. Talk to an accountant tomorrow, and meanwhile, don't worry. I am sure you won't owe much, if anything.

WADR I'd be very surprised if any tax accountant would talk to anybody about last years taxes on April 14. They're a little busy.

OP, bump this after chag and I'll ask my DH (if you haven't figured out what to do).

amother

Mon, Apr 14 2014, 2:47 am

Yeah, I know last year is not an emergency at this time of year, lol. Just I'm a wreck about it because I discovered it at tax filing time. But of course I am not even going to talk to any accountants until next month... I have enough accountant friends and relatives to know that... though they won't be the ones I ask because I am too embarrassed not just of this oversight but of my financial situation in general

amother

Mon, Apr 14 2014, 10:52 am

Again, we have already determined that our kollel checks ARE taxable (as fellowship) and are NOT parsonage (the rules for that are pretty specific and most kollel members would not qualify) or anything. We are SURE that we need to report it, it was an honest error that it didn't get reported because they changed the program last year. From what I'm seeing online on forums and stuff a lot of people were confused by the change - there was NO way to enter it as income as it had been done in the past, now you need to go into deductions, under education, set it up as if you paid for education with a scholarship, and then enter the scholarship. Then it still doesn't show up under income in TurboTax but it does show up in the right place on the 1040. That's what I did this year. Last year I must have made some mistake in that convoluted procedure because it did not show up on my 1040 and I didn't realize it until this year.

Good to know I can still change my return. Does that make you get audited? Because as I said my bookkeeping is a sorry mess, I tried my best but started slipping, and I'm a little worried. I kept careful personal records of everything but receipts and such probably got misplaced.

Also, even if I can amend my return, I am TERRIFIED of what Medicaid and FS will do to us if they find out we earned more than was on our documents. Again, I legitimately qualify and am not out to scam the system, but enough people are scammers that I'm afraid they will come down on me and I'll have something to prove Sad

kollel wife

Mon, Apr 14 2014, 11:22 am

When you apply/reapply to Medicaid, food stamps they don't rely on the tax return only, but usually pay stubs or letter about the kollel check, or stubs. So I imagine they included that income. On the return, Federal only, it's reported lower down, not as earned income on the top line.
If you were redoing Food Stamps on the phone, they will say, what about your husband?

I think your only issue should really be the IRS, am I wrong?

amother

Mon, Apr 14 2014, 11:26 am

I am self-employed so no pay stubs, they do use my tax return as my main form of documentation though we also present bank statements, letters, etc. I haven't had to give a letter from the kollel since I first applied. Also, on anything that asks me to report my yearly income, I've basically just looked at last year's tax return as a reference point. $%#@.

miami85

Sun, Oct 11 2015, 8:50 am

We were told by an experienced accountant that Kollel stipend is "income" but not "taxable"--I.e. it goes against your total income which determines your tax bracket, but the income itself is not subject to Social Security/Medicare etc. tax. So unless it would really change your tax bracket, don't think it would really affect things, but speak to an accountant on how to proceed.