Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121219  
Subject: Re: F/UP TMFPMarti, IRA Excess Contrib Date: 3/31/2008 7:16 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
#1: Box 1 $5443, Box 2 $443, Box 7 1, and check the IRA box.

#2: Box 1 $4885, Box 2 $0, Box 7 1, and check the IRA box.

This should give you $443 on line 15b and $44 on line 60 of the 1040.


I finally got all my data to file, and.
I did all of the above with the following changes. Box 7, I selected "8" vs "1" and I did check the IRA box.

This resulted in the $10,329 in 15a, $443 in 15b, but nothing on line 60.


Well, first the good news. Your return is showing the correct numbers on lines 15a and 15b, assuming there's a typo by one of us in your numbers regarding 15a. (According to what's shown above, 15a should be $10,328.) I've gone back and re-read the thread, and it's up in the air as to whether there should be a penalty. It slipped right past me earlier that at least one of you was over 59 1/2 at the time of the distributions.

Regardless of what the software is doing, if the person with the positive earnings was under 59 1/2 at the time of the distribution, you owe the 10% penalty on the earnings.

Software complicates, rather than simplifies this process. I input two 1099-R's with code 1 and two with code 8, both spouses under 59 1/2. Code 1 correctly produces the penalty; code 8 doesn't. I have no idea why.

What we need to know is whether in your specific case the penalty applies.

Also, the fairmark folks suggested to everyone with a similar situation to add an explanatory note, so the IRS will be happy when this is reported for 2008. I added the explanation at line 15b where there is box to select an explanation, but I don't see where this shows up in the forms to the IRS.

Actually, it has nothing to do with your 2008 return. The 2007 instructions tell you to attach an explanation of the numbers on line 15. When you print out a final version of your return we'll see whether the software has produced the statement because you checked that box, which isn't on the actual 1040.

Phil
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (14) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement