Carl or Any other Expert,
1. Would it be appropriate to request a correction to my 1099-R (retiree W2) as that distribution was coded "7" [normal] as opposed to what I believe *SHOULD* have been a "3" [disability] as my effective medical retirement was effective 29 Aug 2019 where I was placed (and is still) on TDRL (Temporary Disability Retirement List) and thus I am currently rated at 100% on this TDRL, but the maximum pay per TDRL is 75% for DoD (Department of Defense) if I wasn't eligible for VA (Veteran Administration) pay [which I was indeed eligible]? TDRL as the name implies is a "disability retirement" and consequently, it makes sense that the pay of a "disability retirement" should be distributed as such (or so I assume- 1.a is there something contrary to this somewhere).
Both DoD & VA knew my entire September 2019 pay (pay out on 1 Oct 2019) was supposed to be coming from the VA (as I went through the Integrated Disability Evaluation System [IDES] which is VA & DoD working together to determine my disability) and entirely TAX exempt....but they were about 3-5 days slow in finalizing my pay check, so instead of my money coming out of VA, a portion (75%) came out of DoD (and the remaining 25% eventually got paid days later by the VA). Thus almost $300 was sent to Uncle Sam in federal taxes on the 75% that was paid by DoD and coded "7".
I have already sent off my request for an ammendment to a distribution code 3, but as I have seen you around on this message board before with good tax answers, I am trying to get your input so I can get ready to file my taxes sooner rather than later.
2. Would this distribution code 3, then automatically count my federal tax paid for that amount exempt (and thus get back dollar for dollar exactly what was paid) and thus, not needing to do some "manual override" on Turbo Tax and having to send printed up forms (VA letter, etc.) to the IRS? I ABHOR anything that I have to physically mail off at the post office and is trying to see what I can do to avoid such a thing.
3. Along similar lines as it pertains to tax exemption as it pertains to disability, how would I go about requesting disability status from the IRS this tax season, as I am 100% disabled through VA, DoD, and SSA (Social Security Administration) all effective end of August 2019, so if and when I take a distribution out of my Thrift Saving Plan (TSP), I will avoid the tax penalty for early withdrawal (as I am currently 41 and no where close to the 59 1/2 age)? Unfortunately the IRS could not answer my question when I called them in November 2019 as the tax experts at the IRS are only available through the tax filing window (which I would imagine just started this month)?
I love taxes and get down into the minutia (I was planning on pursuing forensic accounting or something similar... but ultimately went with going in the medical field in the military after much accounting courses as well as an introductory personal income tax course).
Thanks in advance for your assistance in answering the three questions [to include the sub-question 1.a] above.
Nathalie
