I'm hoping someone here can tell me what's going on and tell me where to get it straightened out.
My wife and I had life insurance for 17 years and cancelled it at the end of last year.
I paid $84.50 per month for a total of $17,233
The payments were made from our checking account with money that was already taxed
After my wife had already filed this year with TurboTax, the insurance company sent us both 1099-R froms and when we called they said that I owe taxes on the money returned form the life insurance policy and that my wife doesn't.
I got a check for $8,240, with a taxable amount of $6,043.30 and $2,197.00 in box 5 on the form; designated to a Roth or insurance premiums
My wife got a check for $7,252.58 and her 1099-R says that $5,787.34
The insurance company says that I owe income tax on my refund but my wife's 1099-R was a mistake and to disregard it. Both policies were the same and the company has been notorious for making mistakes and that's why we canceled the policies
I just called the IRS helpline and they said that they don't help with this. The woman said ''If the insurance company says you owe taxes, then you do owe taxes''.
The money returned is from the savings portion of the insurance policy. How can this be taxable?
So where do I go from here? The IRS seems to be no help.
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''Sweeney - you can both crush your AG *and* cruise in dead last!! ๐ '' Murphy's Law