Answers in Accounting and Tax

Whether you’re preparing your annual taxes, trying to minimize your tax liability, or preparing for an IRS audit, having a CPA or tax professional in your corner can drastically reduce the burden.
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First, who is the plan provider.
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Roth IRAs are not taxed at all (as long as you are over 59 1/2 yrs old & have had the account open for more than 5 years. Withdrawals from your 401(k) will be taxed at the same rate as ordinary income tax (no penalties as long as you are over 59 ...(more)
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You can still contribute to an IRA even though you are able to contribute to a 401k, assuming you do not exceed the annual income limits. here is the link to the IRS website regarding this https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work ...(more)
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Based on my tax research resources, the short answer is participation in an employer plan will make you ineligible for a tax-deductible IRA in the same year. An employee is covered by an employer retirement plan for a tax year if the employer has a: • ...(more)
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While I don't know your specific situation, in general I don't favor raiding retirement funds to pay off your house. You generally won't be able to replace those funds, and the tax that must be paid beyond the mortgage payoff is so significant as to substantially ...(more)
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I would need more information to adequately answer that question. It really depends on what your top tax bracket is. For the Roth distributions, you won't have any taxes due, but the 401(k) will be added to your taxable income if it is a non-Roth 401(k). ...(more)
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Hi Aaron, The plan should have used code 2 in box 7 of your 1099R, which tells the IRS that there is an exception to the 10% penalty. If they put a code 1 in that box you need to use the form 5329, as they suggested, to avoid the penalty. In Part 1 ...(more)
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Edwin, I tend to agree with both Gary and Davin. Gary has provided the general rule of thumb and Davin's request for more detailed information is appropriate to provide a specific more detailed answer to your question. However, the bottom line is that ...(more)
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Gary Ray Duell Level 18
Not enough information, Cynthia. Do you mean a pension? 401(K), 403(b), IRA, etc.? Social Security? And BTW there may be good reasons to take a Social Security survivor benefit at age 60.
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Yes, and while the distribution would have been reported as taxable income for 2014 on an IRS Form 1099-R, it should not have been subject to the additional penalty tax on early distributions taken prior to age 59 1/2 [IRC §72(t)], as long as (1) you ...(more)
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Gary Ray Duell Level 18
Edwin, there are a lot of moving parts to your plan. But the general rule of thumb I use is that you should not pay off the mortgage if its net cost is lower than a safe investment rate of return. I know. Jim Cramer yells about the absolute evil of ...(more)
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Davin J Carey Level 1
Edwin, I saw this comment regarding your 401k and also another post about an annuity. It seems like you need an advisor to help sort this all out for you and I'm not sure a message board will provide the best resolution. Would you be able to email me ...(more)
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That of course depends on your tax situation. for example If you are in a higher tax bracket than 20% thank you would owe more. Also if you filed your taxes without putting the 1099r on your tax form than you may owe money because you received to big ...(more)
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Chad W Schiel Level 15
You always have the freedom to cash out your 401k or IRA. Just understand that taxes and penalties will apply. First find out why is your 401k custodian, Fidelity or American Funds for example. Call them up and navigate their prompts as directed. You ...(more)
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First I am sorry for the loss for the beneficiary's son. Because the son was not required to take distributions due to his age there are a couple options available to the non-spouse beneficiary. I am assuming that the inherited funds are still with the ...(more)
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Peter C. Karp Level 20
Jon-Paul If your son received the distribution in 2015, he would report it on line 16a. If he did NOT roll it to another plan or to an IRA within the 60 days, he will also report the taxable portion of the pension on line 16b. If the distribution was ...(more)
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If you are contributing to a 401k, you can also contribute to a sep-ira for self-employment income but only up to 20% of your self-employment income. Are you maxing out on your 401k-if not, probably easier to just contribute to that for now.
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Hi Caron, Yes, you should have and most likely will. Given the deadline for mailing was yesterday, I would give it a week or two before you call Zurich Advantage. They can certainly help you if it was lost.
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I am sorry, but I do not understand the question. Can you be more specific?
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Jennifer, The safest thing to do is follow the instructions from the IRS. Use this link to help: https://www.irs.gov/uac/How-Do-I-File-a-Deceased-Person's-Tax-Return%3F
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If your child is disabled or incompetent and the child lives in your home for over half a year and you pay more than 50 percent of his/her support you can deduct the 26 year old as a dependent. If you child is not disabled or incompetent and is freeloading ...(more)
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IRD Income in respect to a decedent is what you are describing. Taxes are due on this income. Often when a decedent has a retirement plan the taxes in some cases can be greater than the estate tax (if any). File the individual Form 1040, assuming he is ...(more)
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I am sorry, but it seems that you do have the wrong site. Log on to your broker-dealer's site to access those statements. Good luck!
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Peter C. Karp Level 20
Kathy, I agree with the other advisors in that you can rollover your distribution to an IRA or to another employer qualified plan to avoid the early withdrawal penalty of 10%. Once you reach age 59 ½ the early withdrawal penalty of 10% would not apply ...(more)
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Davin J Carey Level 1
Hi Kathy, While Chris is correct that you could roll over your DB plan into an IRA or other type of qualified plan and NORMALLY be subject to penalties for distributions pre 59 1/2, there are also some rarely used tricks in the IRS code that I think may ...(more)
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Chris Schiffer Level 14
Kathy, Since your employer allows the option to take a lump sum distribution, you can do so. You will be taxed on a payment from the Plan if you do not roll it over and since you are under age 59½ you will also have to pay a 10% additional income tax ...(more)
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John Essigman Level 17
Hi Alka, Sorry but no... fines and penalties are generally not deductible. Warmest regards John Essigman www.bluecreek.net
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Lon M Jefferies Level 17
Mike, I agree with Nathan on this issue. Assuming you rolled the after-tax contributions into a Roth IRA, you can access the entire account balance without penalties or taxes assuming the withdrawal is for the purchase of your first new home. However, ...(more)
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Hi Mike, Good question. If you are only taking out your contribution and not any earnings then you can withdraw this amount without any tax or penalty. The biggest determinant will be if you deposited the money in a Roth IRA or a Roth 401k with your new ...(more)
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Richard P Taylor Level 17
Mike, there likely won't be a tax consequence, but there could be a 10% penalty if you are withdrawing prior to you being 591/2 years old. There are a few ways you can escape the 10% penalty (used for higher education), but it would not apply to the ...(more)
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