Larry, my mom and I have a joint IRA. She is 73 years old and I am 45 years old. How do we figure out how much of it is taxable to each of us?
Helen
Helen, there is a problem here. There is no such thing as a joint IRA. You need to call up your financial advisor and find out more about the account. It is possible that you’re the beneficiary of your mom’s IRA – that’s a whole other matter. If that is the case, it’s taxable to your mom during her lifetime and then it passes to you at her death. But you can’t own an IRA together during her lifetime.
Larry Kopsa CPA
Showing posts with label IRA. Show all posts
Showing posts with label IRA. Show all posts
Friday, April 30, 2010
Thursday, April 29, 2010
IRA WITHDRAWALS
I filed an extension and am working on my 2009 tax return. Last year, I cashed in my IRA to pay off some doctor bills. I lost my job and couldn’t pay but I did have my IRA so I used that to pay. I used the whole thing. Now going through my papers I found that I got a 1099 that says that it is all taxable. Please help because I thought it was not taxed if you use it to pay the hospital. Thank you.
Al
Bad news Al. Amounts you withdraw from a traditional IRA are generally taxable in the year you withdraw them, no matter what the reason for the withdrawal.
There is more bad news. If you’re under age 59 1/2, you may be subject to a 10% additional tax plus possibly a state surtax. There are a few exceptions to the additional tax rule. This is what may have confused you. You can avoid the 10% additional tax (not the regular tax) if your IRA withdrawals are equal to or less than your deductible medical expenses. This means if you had medical expenses greater than 7.5% of your adjusted gross income (the number at the bottom of page one of your return).
But there’s no exception for medical expenses that would allow you to escape taxation of your entire IRA. Sorry.
Larry Kopsa CPA
Al
Bad news Al. Amounts you withdraw from a traditional IRA are generally taxable in the year you withdraw them, no matter what the reason for the withdrawal.
There is more bad news. If you’re under age 59 1/2, you may be subject to a 10% additional tax plus possibly a state surtax. There are a few exceptions to the additional tax rule. This is what may have confused you. You can avoid the 10% additional tax (not the regular tax) if your IRA withdrawals are equal to or less than your deductible medical expenses. This means if you had medical expenses greater than 7.5% of your adjusted gross income (the number at the bottom of page one of your return).
But there’s no exception for medical expenses that would allow you to escape taxation of your entire IRA. Sorry.
Larry Kopsa CPA
Monday, December 29, 2008
IRA CONTRIBUTION
Larry, I am 63 and plan on retiring at the end of the year. Can I still make an IRA contribution for 2008? Henry
Henry, the answer is yes. For the 2008 tax year you can contribute $5,000...that is assuming that you have earned $5,000. In addition, since you are over age 50 you can add an additional $1,000 for a $6,000 total. It does not matter when during the year you retire so long as you meet the compensation requirement. But you can no longer contribute to an IRA after you reach age 70 ½.
Henry, the answer is yes. For the 2008 tax year you can contribute $5,000...that is assuming that you have earned $5,000. In addition, since you are over age 50 you can add an additional $1,000 for a $6,000 total. It does not matter when during the year you retire so long as you meet the compensation requirement. But you can no longer contribute to an IRA after you reach age 70 ½.
It is a pleasure serving you.
Larry Kopsa CPA
Subscribe to:
Posts (Atom)
