Am I Eligible For IRA Income Tax Question

by Jmr
(Monroeville, PA)

Am I Eligible For IRA Income Tax Question

I have a disability and had to quit my job.

I receive monies from UNUM Life Insurance third party plans (through my past employer)and receive a W-2 yearly.

On the W-2 in box 13 Third-party sick pay is checked. Does this enable me to open an IRA?

Can I Contribute To My IRA

by Bill
(New Jersey)

I retired in June of 2011 and began collecting a pension in July. Can I contribute to my IRA for this year, 2011?

Could my Roth IRA Conversion Cost Change Based on Choosing Split?

by Mark
(San Diego)

OK here is the situation. I rolled my Traditional IRA into my Roth IRA for 2010 and the total was $21,405.

My question is will the amount I pay change depending on if I pay the conversion cost now or use the 2 year split.

Originally I was getting $1006 back on my 2010 federal taxes.
If I decide to pay the whole IRA conversion amount I will owe $2615 instead of getting 1006 back.

I know the Bush taxes are staying in place.
But, the question is if I decide to do the 2 year Roth IRA conversion cost split for 2011/2012 will the amount of the rollover be the same price, just split in two?

Or, are the amounts I owe for 2011/2012 based on how much money I will make those two years?

My goal is to make more money in 2011/2012 than I did in 2010.

Thank you and hope this question helps others.

Mark

Excess Contribution to Roth IRA

by Donna
(Albany, NY)

I'm working to get my taxes filed for the 2010 extension deadline.

As I input the final numbers into my Premium tax software, it informed me that I had an (about $800) excess contribution to my Roth IRA for 2010. That IRA contribution was made in June 2010. Stock I bought with over two thirds of that contribution has dropped by more than 50%.

How best to handle the excess? Pluses and minuses of each course of action?

I've already made my 2011 contribution. One consideration is pay the 6% penalty for 2010 and 2011, then contribute less in 2012.

Withdraw the excess plus interest is an option. Would I still pay the full contribution back plus interest--even though I lost half the money?

I'm not thinking about recharacterization, at this point in time. Seems like more trouble than it's worth for my circumstances.

IRA Account

by Mary
(NC)

My husband and I withdrew some money out of our IRA account and did not have taxes withheld. When we fill out our income tax forms this year where should I list this money on the form for both state and federal?

IRA Contributions

When my father died, his IRA money was given to me. I put it in my personal IRA account. Is that deductible and how much of a contribution is deductible?

IRA Distribution

by Robert
(Hartsville, sc, usa)

In 2007 I deducted $5000 for a deductable IRA contribution. I worked for a company a few days in 2007 and and they had a retirement plan. In 2009 IRS denied the 2007 year deductable contribution because the company that I worked for in 2007 had a retirement plan.
The IRS said if I worked any part the year, the deductable contribution is denied. I paid the taxes on the $5000 plus a penalty.
In 2011 I will be 70 1/2 years old and will start withdrawing from my IRA in December 2011. I did not file form 8606 for 2007 tax year. How will I determine what will be the taxable part of my withdrawal for 2011.
At the top of form 8606(part 1)the 2nd dot says I must file form 8606.
On line 1 I would put 0.
What would I put on line 2 since I did not file form
8606 in 2007 ? Would I put $5000?

IRA Early Cash Out Penalty

Early Withdrawal Penalty

When I cash out my IRA I know that I will be subject to income tax. I am divorced this year so I was wondering if the 10% penalty fee is waved with this qualifing event?

Hello,

Thank you for your IRA Early Cash Out Penalty question. Unfortunately, divorce in and of itself does not qualify for the an exception to the 10% penalty fee. Following are the exceptions:

Exceptions

There are several exceptions to the age 59½ rule. Even if you receive a distribution before you are age 59½, you may not have to pay the 10% additional tax if you are in one of the following situations.

You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.

The distributions are not more than the cost of your medical insurance.

You are disabled.

You are the beneficiary of a deceased IRA owner.

You are receiving distributions in the form of an annuity.

The distributions are not more than your qualified higher education expenses.

You use the distributions to buy, build, or rebuild a first home.

The distribution is due to an IRS levy of the qualified plan.

The distribution is a qualified reservist distribution.

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