Here is my problem, the VA paid over $7,000 in taxes on my disability severance pay just this past year (2019), so this will be my first tax return since it was paid, so I can't go the 1040x route.
When I follow the instructions to report my severance pay as a negative number in other reportable income, it only calculates roughly $3,000 in my return.
How do I file this so that I receive the full amount paid in return? I've looked everywhere and can't seem to figure it out.
The real issue here is that because this is non-taxable income, the VA is going to recoup the full amount paid to me. Therefore if I cannot recoup the taxes improperly paid, I end up losing $4,000 out of my own pocket because the government screwed up and paid themselves extra. Sounds like a scam to me.
