Preface: I am familiar with IRS Publication 525
We had to repay disability insurance funds to an insurance company based on approval of Social Security disability. This approval happened in late 2023. We attempted to get this process completed before the end of the year, but the insurance company did not process the transaction until early 2024. The repayment applies to 2022 and 2023. The W-2 the insurance company sent me for 2023 reflects none of the repayment.
Q1: How should I handle this for tax purposes?
Q2: Is there any way for me to apply any of this to my 2023 taxes, as my AGI looks greatly exaggerated based on this timing issue, and will result in a large tax liability on funds I did not get to keep? Is there any leeway with the reporting considering the repayment technically did not get done in 2023? Do I have any right to ask the insurance company to generate a corrected W-2?
