Page 1 of 3 1 2 3 LastLast
Results 1 to 10 of 23
  1. #1
    Join Date
    Nov 2016
    Posts
    2

    Default Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Located in West Virginia. Recently diagnosed with serious degenerative illness. I meet the 40 part of the 40/20 formula. But I have been self employed and took max deductions for a better return so now short on Credit Quarters by 4. I sell through Etsy and file through H&R B, so income and expenses can all be proven. Is it allowable by IRS to amend (2) tax year filings in which I had stated a loss and pay all incurred penalties and interest in order to meet 20 quarters requirement? Also is the 20 quarters needed over 10 years or 15, I found some conflicting information.

  2. #2
    Join Date
    Oct 2016
    Location
    Florida
    Posts
    26

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Whether or not you are required to take all deductions you are entitled to is a common question. Most business expense provisions start out with "There shall be allowed . . . " inferring that claiming them is mandatory. However, many are subject to interpretation. For example, an office in the home must be used "exclusively and regularly" for your business. If you claimed one and the use is not entirely exclusive (almost none are), then you could amend the return to exclude it. However, if you have clearly deductible expenses (such as cost of goods sold or selling fees) you could amend the return to exclude them but it could land you in trouble with the Social Security Administration for filing a false claim. In short, the IRS probably won't care (unless you're doing so to claim an otherwise unallowable credit such as EITC) but the Social Security Administration may.

  3. #3
    Join Date
    Mar 2013
    Posts
    18,340

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    And if some of those earlier deductions were, shall we say, "creative" the IRS might care.

  4. #4
    Join Date
    Jun 2014
    Posts
    3,212

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    In order to be eligible for SSDI, if approved on medical, you must have at least 20 credits for 5 out of the past 10 years. The amount of SSDI won't be much. If the monthly SSDI is less than $753 in 2016, if you have little or no other income and don't have more than $2,000 in resources you may be eligible for SSI to make up the difference so you receive a total of $753 a month in SSDI and SSI. If you are married, your spouses income is also counted towards SSI. Income and resources are not counted for SSDI.

    It takes more than a diagnosis and difficulty working to be approved for disability. Having worked from home, may or may not pose a problem. If you are under 50, SSA will look at jobs in the national economy.

  5. #5
    Join Date
    Jan 2009
    Location
    California
    Posts
    1,045

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    You need 20 quarters in the 40 quarter period before your date of onset. Roughly, you had to have a profit in your business in 5 out of the 10 year period before your date of onset. Although you can earn one, two, three or four credits each year, depending upon your actual profit

    So are you saying that H&R Block completed false tax returns and took illegal "max deductions"?

    The IRS probably won't care much if you decide to amend the tax returns and pay the taxes and the penalties. SSA may take a harder look at your amended tax returns and decide that the profit is false and may remove the false profit from your earnings record. You will have to prove much more than providing an amended tax return.

    Have you thought about continuing this home based business and kick it up a little so that you get a valid profit in 2016 and maybe even in 2017, if those years are needed? Of course, you won't qualify for SSDI until you meet the insured status rules AND are found to be disabled.

  6. #6
    Join Date
    Oct 2016
    Posts
    147

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    I imagine the answer is yes. Though I cannot guarantee, it can't hurt to try.

    there are two tests you have to meet to qualify for SSDI:

    1. enough work credits
    2. recent work test

    Do you qualify for SSI? If yes, then you may wish to forget about the hassle with past tax returns, and apply for SSI instead or SSDI. My sense from your post is that your SSDI wouldn't be that high a check anyway.

    I'm honestly not sure if SSA would notice or care about the change in your tax records. I've never heard of them scrutinizing past tax documents (from before the onset date of your disability). They will look at the IRS documents after your onset date for sure. If you amend your past taxes, your work credits may automatically update in the ssa system, or you may have to contact them and ask to correct your earnings history.

    Just because I have never heard of them scrutinizing past tax records doesn't mean it's never happened. If this is the only way to qualify though, you don't have much to lose by trying - except back taxes, of course.

    I do know someone who didn't have enough credits because their employer hadn't filed things on time (or maybe at all). he somehow managed to get those records and was able to later get his credits changed and is now on SSDI.

  7. #7
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Quote Quoting kit cat
    View Post
    Just because I have never heard of them scrutinizing past tax records doesn't mean it's never happened. If this is the only way to qualify though, you don't have much to lose by trying - except back taxes, of course.

    I do know someone who didn't have enough credits because their employer hadn't filed things on time (or maybe at all). he somehow managed to get those records and was able to later get his credits changed and is now on SSDI.
    The SSA DOES scrutinize those kinds of things.

  8. #8
    Join Date
    Oct 2016
    Posts
    147

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Quote Quoting llworking
    View Post
    The SSA DOES scrutinize those kinds of things.
    Thank you.

    I have never heard of them examining tax records that happened BEFORE onset date. Have you ever met someone this happened to?

    Even if they did look... I guess I'm not aware of any policy or law this would break?

  9. #9
    Join Date
    Oct 2006
    Posts
    16,474

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Quote Quoting kit cat
    View Post
    Thank you.

    I have never heard of them examining tax records that happened BEFORE onset date. Have you ever met someone this happened to?

    Even if they did look... I guess I'm not aware of any policy or law this would break?
    It is against the law to arrange a Schedule C (in contrary of the actual facts) in order to earn Social Security credits. The SSA receives those records from the IRS in order to put them on the person's Social Security credits history. If the history changes, shortly before or during someone's application for benefits, its going to be noticed, and scrutinized.

    That is simply reality.

  10. #10
    Join Date
    Oct 2016
    Posts
    147

    Default Re: Can a Self-Employed Person Amend Past Tax Returns in Order to Qualify for SSDI

    Quote Quoting llworking
    View Post
    It is against the law to arrange a Schedule C (in contrary of the actual facts) in order to earn Social Security credits. The SSA receives those records from the IRS in order to put them on the person's Social Security credits history. If the history changes, shortly before or during someone's application for benefits, its going to be noticed, and scrutinized.

    That is simply reality.
    good point. thank you. I'm not sure it would create an issue in this case, since the person would not (I assume) be making up any income, and they said all income can be proven, so it could just be a question of amending what deductions were taken. I don't know anything about IRS regs though and how they react when you change your deductions retroactively.

    I guess it would be best to sort out work credits before applying. If someone applied and got a technical denial, then trying to appeal the denial based on shifting tax records, I could see how that could raise more issues.

    1. Sponsored Links
       

Page 1 of 3 1 2 3 LastLast

Similar Threads

  1. Replies: 7
    Last Post: 03-13-2014, 03:03 PM
  2. Traffic Accidents: Why Are Past Tax Returns Relevant to a Personal Injury Claim
    By shawa in forum Accidents and Injuries
    Replies: 11
    Last Post: 04-02-2012, 10:23 PM
  3. Federal Taxes: How to Amend a Past Tax Return
    By keil in forum Tax Law
    Replies: 7
    Last Post: 10-24-2011, 06:44 PM
  4. Federal Taxes: How Can I Get My Deceased Son's Past Federal Income Tax Returns
    By BJWings315 in forum Tax Law
    Replies: 4
    Last Post: 10-05-2011, 09:29 PM
  5. Unemployment Benefits: Filing New Claim, but Need to Count Self-Employed Income to Qualify
    By drs in forum Employment and Labor
    Replies: 1
    Last Post: 08-04-2010, 06:16 PM
 
 
Sponsored Links

Legal Help, Information and Resources