Disability from VA

[equinecpa]

I have a client who received 3 disability payments from the VA last year. He doesn't know if they are taxable or not. He doesn't have a 1099 or W-2 for them. Would it be safe to assume if he didn't receive an income slip that they are not taxable?

Thanks

Carolyn

[DaveO]

If based on % of disability, not years of service

or rank attained the payments are not taxable. They are not reported to the taxpayer. Not sure if reported to the IRS or not.

[ChEAr$]

ACtually,.....

or rank attained the payments are not taxable. They are not reported to the taxpayer. Not sure if reported to the IRS or not.

No payments from the VA are ever taxable. At least I've never run across any exception
to this rule.

[jainen]

Unless

>>No payments from the VA are ever taxable<<

Unless you're an employee... ?

[Corduroy Frog]

No 1099

Disability payments from VA are not taxable, but you raise a curious point.

One of the "myths" out there is that income is not taxable if there is no 1099. Information returns have become so myriad and commonplace that taxpayers (and a tendency for preparers too) have attached a one-to-one mapping of 1099s and income.

It's like, if a 1099 represents income, people assume the contrapositive: no 1099 means no income.

Getting a little bit away from Carolyn's original question -- wasn't this supposed to be the year that 1099s were supposed to be issued for exempt municipal bonds? Here would be a case where a 1099 does NOT represent taxable payments.

But, speaking for my own practice, I didn't see much compliance from brokerage houses and other custodians on the exempt income thing. What about the rest of you??

[ChEAr$]

Now you MUST have known

>>No payments from the VA are ever taxable<<

Unless you're an employee... ?

what I meant, eh what?

[jainen]

cheap shot

>>Now you MUST have known what I meant, eh what?<<

Sorry, I just couldn't resist the cheap shot.

Of course I know what you meant. And I also know what you said. And they ain't the same.

[ChEAr$]

It's called &quot;editorial license&quot;

>>Now you MUST have known what I meant, eh what?<<

Sorry, I just couldn't resist the cheap shot.

Of course I know what you meant. And I also know what you said. And they ain't the same.

However i must type something more in here because "they" say my message
was too short. There now.