The Tax Questions Blog

Archive for the ‘Distributions and Contributions’ Category

Taking advantage of the RMD holiday for IRAs.(required minimum distribution): An article from: Journal of Accountancy $9.95 This digital document is an article from Journal of Accountancy, published by American Institute of CPA's on August 1, 2009. The length of the article is 656 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Taking advantage of the R...

IRA distribution funded by community property was taxable solely to participant.: An article from: The Tax Adviser $5.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA's on August 1, 2000. The length of the article is 891 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle...

IRA Distribution Mistakes

Question: Where do I report my IRA rollover contribution on Form 1040, using H&R Block software?

I withdrew $25k, for which I was sent Form 1099-R, and re-deposited it less than 60 days later so that it is treated by the IRS as a rollover and non-taxable. I received form 5498 for the contribution. I am doing my taxes from H&R Blocks website but can not figure out how to do this so I am not taxed or penalized for it as a distribution.

Answer: you report under the IRA distributions portion of the program, and if you enter the information the 1099R as you should be doing, you will notice it asks for a code, either a number or letter, and the letter G indicates it is a rollover, and the program knows enough to enter it that way, the amount is recorded but also not taxable

Income strategies for retirement

Will I have enough money in retirement?

Question: Is tax on an IRA distribution that is converted to a Roth considered unearned income?

Last tax year 2009, I chose to convert $5000 of my kids Traditional IRA to his Roth IRA. I understand that the $5000 will be taxable to him. However, is the taxable amount considered unearned income to him and now subject to"Kiddy Tax" ?

Answer: Yes, it's unearned income and subject to kiddie tax.

If it's not on a w-2, it's kiddie tax--that also includes IRAs, unemployment, etc.

He will have to file a form 1040 with an 8615 attached.

Low-tax states attract budget-conscious Americans

Bob VanSickle was a lifelong New Jersey resident, but when he left after 52 years for what he calls "kinder, gentler" New Hampshire, he never looked back.

Question: Is the remaining balance after paying medical expenses in a HSA taxable?

I understand the contributions I make each payroll are pre-taxed but if I want to save up for a few years for an emergency and not use it, am I taxed on my contributions each year? I don't understand the benefit of doing this unless I have a lot of medical expenses the same year.

Answer: Just to confirm the tax lady, you can deposit pre tax dollars to your HSA and they will not be forfeited, there is no "use it or loose it" rule and you should not pay taxes at all unless you use your HSA money to buy a six pack, some Marlboro's and Frito's, right?

To break it down, you can only get taxed by the IRS, yes? There for, you need to report the money going out of your HSA (conveniently found on your 1099-SA). Also, you need to report your contributions (again, conveniently found on your 5498-SA) to the IRS. All of this needs to be reported to the IRS on form 8889 (as the tax lady noted).

If your employer has a pre-tax plan set up (sec 125) than your money is tax deffered and sits there in the HSA account for ever (in the tax deffered status). So, in short, you pay not taxes on contributions to your HSA account, as you pointed out that would not make sense.

The benefit is that you save up all that pre tax goodness and eventually use it as a retirement account or if you get hit by a bus (since you have a High Deductible Health Plan or as they call it "catastrophic plan" in the trade).

Savvy Consumer: Tax filers who itemize will love Feb. 14

The IRS will begin accepting itemized returns that reflect changes in law.

Question: life insurance distribution taxable?

If I deposit my taxable life insurance distribution into a 529 plan would it become non taxable?

Answer: No.

If the insurance distribution is taxable, first you pay taxes and then you can use the cash for whatever you want.

Trusts owning partnership interests and the revised UPIA.(Uniform Principal and Income Act): An article from: The Tax Adviser $9.95 This digital document is an article from The Tax Adviser, published by American Institute of CPA's on January 1, 2010. The length of the article is 1239 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Trusts owning partnership inte...

Determining the taxable portion of federal pension distributions (SuDoc GA 1.13:GGD-99-73 R) ...

Trend.(Illustrations of Employment, Electric Utilities, Construction)(AIR PASSENGER BOARDINGS)(TAXABLE RETAIL SALES)(Illustration): An article from: Business North Carolina $5.95 This digital document is an article from Business North Carolina, published by Thomson Gale on February 1, 2006. The length of the article is 796 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Tre...

Aberdeen Chile Fund, Inc. Announces Payment of Quarterly Distribution

PHILADELPHIA--(BUSINESS WIRE)--The Board of Directors of Aberdeen Chile Fund, Inc. (NYSE AMEX: CH) (the “Fund”) announced in July its adoption of a managed distribution policy in which the Fund will pay quarterly distributions (the “Distribution Policy”). In connection with the policy, the Fund’s Board of Directors is pleased to report the Fund’s distribution of US 49 cents per share of common ...

Assessment and Taxation