The IRS Deductions Blog

Question: Recharacterization non-Deductible Amount from Tra. IRA to Roth IRA in-kind?

I would like to recharacterize some of my 2008 contribution from Tra. IRA to Roth IRA due to ineligibility to receive a full tax deduction. I found some advice/formula to calculate earning when filing income tax return http://www.investopedia.com/articles/retirement/03/092403.asp but this doesn’t solve my problem when I try to recharacterize the non-deductible amount in-kind (stock). Here is my scenario:
2/1/2008 contribute $100 to Tra. IRA and bought 5 stock A @ 20
3/1/2008 contribute $100 to Tra. IRA and bought 10 stock A @ 10

Now when filing income tax, I realize my non-deductible is $50 and stock A is in the price range of $5/share. What I want to do in this scenario here is to recharacterize $50 from Tra. IRA to Roth IRA in-kind without selling my stock and convert to cash.
Any help would be appreciated. Thanks in advance.

Answer: Hi, I think you are approaching this from the wrong point of view. A re-characterization of a IRA contribution is at face value. It doesn’t matter what it is worth now in your case, what matters is the dollar value of the contribution you made to the account.

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Tax Filing Obligations

In case a non-resident enterprise transfers the shares of a PRC resident enterprise and there is no withholding agent or the withholding agent fails to fulfill the withholding obligation, the transferor shall perform tax filings within seven days commencing from the agreed date of the share transfer, or from the date when a transferor actually receives the purchase price that is paid prior to …

Question: How much money out of pocket to deliver?

I’m 7 months pregnant with my first child. I’m wondering how much money I need to have set aside in order to give birth at my hospital. My insurance has a $500 inpatient copay and a $500 Deductible. Does this mean I will owe $0 upfront, $500 upfront, or $1000 upfront? Can I opt to just have them bill me? I’m just afraid that I’ll show up in labor and they’ll want a check for an amount that I don’t have, I really don’t want to be turned away and sent to county hospital while I’m labor.
I know I will owe the copay and the deductible ($1000). What I mean is how much do I have to pay on the day I go to the hospital in labor?

Answer: Usually, they’ll bill you after the fact.

The hospital will bill you for the $1,000 including your copay, and deductible.

If you’re in active labor, they can’t send you away. It’s the law.
That means, don’t go to the hospital too early, LOL.

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Deductibles and Coinsurances

Question: Is there any way to avoid insurance deductible?

I want to know how insurance works in terms of collision repairs. If I pay the body shop the deductible, that means the insurance pays the body shop the amount they’re charging minus the deductible? If I talk to the body shop first, would there be a way to convince them not to charge me the deductible and charge the insurance company the full amount without them knowing??? Thanks!
I already did the claim. But the thing is my car was parked outside a home (narrow street) when the “accident” happened. I have no witnesses and no one at fault. I do have Deductible Waiver but when I claimed, they told me I had to pay to deductible (500). I am not trying to fraud, Im asking if the insurance should take responsibility of it and waive my deductible or not.

Answer: careful this could be bordering on insurance fraud.
depending on the amount of damage some insurance require their assessor to do an inspection and then you need get about 3 quotes and they pick which one you have to go to which means they will only pay up to that amount, less of course the deductible. the claim is submitted to the insurance company and once they have received your deductible from you they will pay the repairer. the other way is to pay it yourself and submit the claim and you receive the money back again without the deductible. could vary from state to state or country to country. i suggest you ring the insurance company and ask them what you need to do to make a claim but for goodness sake don’t talk about trying to get out of what you need to pay. don’t be stupid do the right thing or you could find yourself in trouble and possibly blacklisted with all insurance companies.

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Question: Tax deduction questions?

Could someone please help me with the following tax questions:

1) I’m a business consultant for a large IT management firm. I travel extensively to client locations but also work from my HOME frequently ~ 30%. Company classifies me as “Mobile” employee – either work at client site or HOME. They do not reimburse internet/phone/office equiptment. I don’t have a “study” room but work mostly in a corner of my room set up for business work. Can I use some of the “home office” deductions?

2) My younger brother does not live with me but I help him out financially from time to time. He’s a recent college grad and unemplpoyed. Could I claim him as a dependant? What would be some rules in order to claim as dependant. He probably wont be filing a 1040EZ.

3) My condo association installed new Green A/C-Heat unit which came out of my condo fee’s. Can I claim the Green deductions ~$300?

Thanks

Answer: 1) Yes, you may take the home office deductions that apply to you. Please remember to hold on to any receipts and applicable paperwork if you were to be audited.

2) Yes, you may claim your brother if he did not make over $3000, you provided more than half of his support and if he is not an eligible to be claimed as a qualifying child on another return. He does not have to live with you as long as he is a relative.

3) Yes, you may take the deduction for the a/c unit if it has a energy star sticker on it. Please hold on to the energy star paperwork and applicable receipts.

If all of these conditions apply to you, you may take all of the credits/deductions.

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With the end of the financial year looming and a lots of cool, new tech coming consumers will be thinking about where to spend their tax refund cheques. Even those wanting an iPad, a device that many say is little more than a glorified iPod, will be getting in on the act with news that the Australian Tax Office has declared it a legitimate tax deduction for education and a “laptop” for the …

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