AI Legalese Decoder: A Savior for Overpaid Employees in Distress
- November 4, 2023
- Posted by: legaleseblogger
- Category: Related News
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**Heading 1: Introduction**
Seeking Help and Advice: Military Overpayment and Potential Tax Issues
**Heading 2: Background Information**
I currently work for Employer X with a salary of $85,000 per year. However, starting in May 2022, I went on military orders and have been on military orders since. During my absence, Employer X has been kind enough to partially cover my salary.
**Heading 2: Concern Regarding Overpayment Letters**
Recently, I received two letters dated 10/18/2023 and 10/19/2023, respectively, which addressed a prior overpayment issue. The first letter states that there was an overpayment in the amount of $32,923.67, with a gross payment amount of $47,115.46. The second letter addresses another overpayment, this time amounting to $45,375.89, with a gross payment amount of $49,134.69.
**Heading 2: Detailed Explanation of Tax Regulations**
According to the first letter, IRS regulations dictate that the net payment amount should be paid back during the year of overpayment to ensure it is processed before the year-end cutoff. Failure to pay the net amount by December 17, 2023, may result in the payment being considered incomplete. Additionally, any payments received after December 29, 2023, will not be processed until the following year, and if paid after the year of overpayment, the gross repayment amount will be required based on IRS regulations.
The second letter further explains that according to current tax laws, an overpaid amount that remained unrecovered from a previous year needs to be reported as income in that year. The employer is not allowed to modify the employee’s Form W-2 to adjust for federal, state, and/or local income tax wage or withholding amounts. As a result, the amount due back to Employer X includes any withheld income tax and additional Medicare tax from the overpayment.
**Heading 2: AI Legalese Decoder**
In this situation, the AI Legalese Decoder can prove to be immensely helpful. The Decoder can analyze the content of the letters and provide clear and concise explanations of the key points outlined above. It can simplify the complex tax regulations, ensuring a better understanding of your obligations and potential options for repayment.
**Heading 2: Concerns and Seeking Clarification**
Given the substantial amount of overpayment, totaling nearly $79,000 over a 14-month period, there is a concern about the repayment terms. The discrepancy between the overpayment amount and my salary of $83,000 raises questions, particularly regarding whether not repaying the debt in the same year would require repayment of the gross amount. However, the employer’s letter indicates that they will provide support for claiming a deduction or credit on my 2023 personal income tax returns once the overpayment amount is repaid.
**Heading 2: Requesting Assistance**
Due to the nature of my work and current location, it is challenging to consult a Certified Public Accountant (CPA). Hence, I would greatly appreciate any assistance in understanding the situation and exploring potential solutions before seeking professional advice.
**Heading 2: Conclusion**
In conclusion, I apologize for the lengthy post, but this issue has caused me significant worry. Any guidance or advice on how to proceed and make sense of the situation would be highly valuable to me. Thank you for taking the time to read and potentially offer assistance.
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AI Legalese Decoder: Simplifying Complex Legal Language
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You get an itemized deduction in the subsequent year in which you repay. You cannot lower the W2 amount, and a CPA will tell you the same thing. https://ttlc.intuit.com/community/taxes/discussion/bonus-repayment-in-another-year/00/2340802
This happened at my former employer. Payroll had overpaid multiple employees for months. First they sent out letters like the ones that you received to recover the money. Finance and Payroll were very concerned about the tax implications.
Later, they realized that New York State law limited them to 8 weeks of time to notify employees of an overpayment.
The employees all got to keep their overpayments.
DonÔÇÖt pay them anything back until you get some legal advice.
I won’t pretend to know anything about the taxes side of things, however, how is it that you were overpaid by around $80,000 and never noticed? I hope you’ll consider looking closer at your finances regularly from here on. Negligence like that can easily lead to uncaught fraud charges and other similar things. I’m assuming you don’t have a budget (otherwise you would have caught the extra income.) That’s a great place to start for you.
>My salary is $83,000, and the total debt is nearly $79,000 for 14 months of overpayment (May 22 – June 23), so it seems like the numbers do not add up.
How are you getting $79k? (47,115 + 49,134) ├À 14 * 12 = $82.5k (q&d math but it’s damn close)
>So here is my big concern, am I screwed for not paying the 2022 debt in the same year?
Would it have been better if you/they had noticed this and fixed it last year? Yes, but that ship has sailed. You *probably* don’t need a CPA (and you definitely don’t need one right *now*), you can probably get everything resolves with some posts in the r/tax sub.
>that will make me whole once I do my taxes in 2024 for 2023?
Whole-ish, this is where the posts to r/tax would come in. It’s easier if you itemize but I don’t believe you’re completely screwed if you don’t.
First of all, call the find out what state you are in, assuming you are in the US. And call the department of labor. Also you may want to consult an attorney and probably a cpa. Whatever happens from this will be a mess so buckle up.
Finally, get professional help, not advice from internet strangers.
I think you should absolutely get an attorney to advise you about this. Someone who knows all the ins and outs of employment law who has dealt with these situations a lot.
CPA and payroll manager here. You need to pay a CPA to sort this out for you. Pay back what you must and let the CPA sort the tax side of it all. You need to do damage control with your employer as to how you were paid but didnÔÇÖt notice or ask questions sooner. Maybe they will let you pay it back over time, or atleast give you some time to come up with a plan to do so. This is a black eye on them and you and believe me, they want this to ho away asap as itÔÇÖs a bad look for them. If you take position you wonÔÇÖt or canÔÇÖt pay it back, better be ready to go quickly and they still may sue you if they choose to. Good luck.
I’m not a lawyer and I’m not a financial advisor but what would make the most sense for me is if they paid you $80 you would owe them $80 because zero of that should have ever came out of there pockets. Now if you paid tax on that $80 or if you paid HSA contributions or 401K contributions or any other payments that came out of the paycheck on top of that $80, that is where it gets to be a gray area. I’m not sure who’s responsible for figuring out how to get that money back or who owes that money to who maybe the state owes it directly to them maybe the state owes it to you and then you owe it back to the company. That’s we’re getting a CPA or someone well-versed in taxes as well as a lawyer while versed in tax law and employee law is almost required here.