Archive for June, 2010
Is My Ira Contribution Deductible
June 2nd, 2010
Question: Need to report rollover from qualified plan other than on line 16a?
I received a 1099-R regarding a rollover from a qualified plan to a Traditional IRA. I have duly reported it on Line 16a of my 1040. My question is, do I adjust my basis in my Trad IRA for this amount, on my Form 8606? I have been filing a Form 8606 for three years now, since my Trad IRA contributions are non-deductible, and it is showing a cumulative basis each year. Is the rollover from the qualified plan irrelevant to the basis/Form 8606 calculation? (It would make sense since the qualified plan was pre-tax and all my Trad IRA have been post-tax and non-deductible….Ultimately, I am wondering how the IRS will sort it all out once I start taking actual distributions from this IRA but for now I need to know if it is just reported on line 16a.)
THANKS!
Answer: I researched this to try to get you a resource, but it really depends on the type of plan rolled over. The first link below is the instructions for form 8606, and the second link is the specific part that talks about how to treat rollovers.
I read it and it appears you need to treat the rollovers as a recharictarization and include it in the basis. Really, it just makes sense. You had a pretax plan, you’re rolling it over to an after tax plan and paying tax on it. That just adds to the basis.
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Annual Deductible Means
June 2nd, 2010
Question: On health coverage..If the annual deductible is 4,000,does that mean u have 2 pay that every year?
If so ……..you have to pay the monthly premium PLUS the annual deductible?How do u pay the deductible….in payments or what?
Answer: Yes, you have to pay the monthly premium PLUS the annual deductible. Basically, you pay for health services up to your Deductible Amount. If you have a $1000 Deductible, for example. You have to pay your doctor for every visit, every procedure, etc. until you have paid $1000 out of your pocket (not including premiums). Then the insurance company will start paying. Prior to you meeting the deductible, the insurance company will not pay a dime.
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Standard Deduction Worksheet For Dependents 2008
June 1st, 2010
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2010 tax law changes offer expanded tax benefits
Taxpayers will have until Monday, April 18, 2011, to file their 2010 returns and pay any taxes due — and that’s only one of the changes that will impact you this year.
Buy Down Deductible
June 1st, 2010
Question: I need help with taxes?
I bought a house in July 07. When doing my taxes this year, what will I need to look at and put down? This is the only thing that goes on my taxes as I do not have any kids or deductibles. I would like to continue doing my taxes myself instead of paying a lot of money to someone else. Thanks!
Answer: Go on line at one of the tax sites…like Turbo Tax. There you can do a standard federal form for around 30 to 40. They are very accurate and helpful in walking you through the federal and your state forms and you do not have to pay them until you actually complete your filing process and you will know exactly what your refund is going to be.
Good luck
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Are Fines Tax Deductible
June 1st, 2010
Question: New health care reform question. How far off is the following statement?
Lets say my income is 100k/year I do not carry health care and I choose to pay the fines instead because it is cheaper. 10 months go buy and my wife gives birth to a down syndrome baby boy, Johnny, and the doctor says to me “Johnny needs heart sugary and its going to cost you $250,000 because you do not have health insurance!”
So I get on the phone tell the insurance company I need insurance and since they cannot deny me they pick my family up after I pay $1,000 deductible and now they have to foot-the-bill!!!
Sooner than later all of the insurance companies are bankrupt, because the smart people will do this exact same thing, so the government has to insure ALL of the people at tax payers cost. Taxes go up, 0bamacare quality goes down because the doctors and hospitals do not get paid.
Answer: You’re right on track. It’s a pretty clever first step toward a single payer system that they’ve made here. I give it 10 years before we’re living with Medicaid for all.
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