|
Posted by R. Pile on March 3, 2008, 12:06 pm
Please log in for more thread options
In 2006 a client contributed the maximum allowable to her company's
401(k) plan. In March 2007, she received a "refund" of approximately
$13,000+ from the plan administrator, since the plan was found in
violation of the Highly Compensated Employee rules. Of this amount
withdrawn from the plan, approximately $12,000 was her contribution
and another $1,000 was earnings on her contribution.
Since it was received before April 15, 2007, the $12,000 was included
as income (salaries and wages) on the 2006 tax return. She has now
received a 2007 1099-R showing the entire $13,000 as taxable, but with
a code "P," indicating it was taxable in 2006. When I enter this
information into my tax software, it includes the entire $13,000 on
the pension line as taxable in 2007. Only the earnings of $1,000
should be taxable in 2007; the $12,000 balance was reported and taxed
in 2006.
What overrides do I need to enter to have this handled this
correctly? Do I show $13,000 received, but only $1,000 taxable? Do I
delete the 1099-R entirely? Is the $1,000 reported as pension or
interest? Will an override eliminate the ability to file
electronically?
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by Allan Martin on March 3, 2008, 1:12 pm
Please log in for more thread options
> In 2006 a client contributed the maximum allowable to her company's
> 401(k) plan. In March 2007, she received a "refund" of approximately
> $13,000+ from the plan administrator, since the plan was found in
> violation of the Highly Compensated Employee rules. Of this amount
> withdrawn from the plan, approximately $12,000 was her contribution
> and another $1,000 was earnings on her contribution.
>
> Since it was received before April 15, 2007, the $12,000 was included
> as income (salaries and wages) on the 2006 tax return. She has now
> received a 2007 1099-R showing the entire $13,000 as taxable, but with
> a code "P," indicating it was taxable in 2006. When I enter this
> information into my tax software, it includes the entire $13,000 on
> the pension line as taxable in 2007. Only the earnings of $1,000
> should be taxable in 2007; the $12,000 balance was reported and taxed
> in 2006.
>
> What overrides do I need to enter to have this handled this
> correctly? Do I show $13,000 received, but only $1,000 taxable? Do I
> delete the 1099-R entirely? Is the $1,000 reported as pension or
> interest? Will an override eliminate the ability to file
> electronically?
Help us help you, what tax software are you using?
>
> --
> << ------------------------------------------------------- >>
> << The foregoing was not intended or written to be used, >>
> << nor can it used, for the purpose of avoiding penalties >>
> << that may be imposed upon the taxpayer. >>
> << >>
> << The Charter and the Guidelines for submitting posts >>
> << to this newsgroup as well as our anti-spamming policy >>
> << are at www.asktax.org. >>
> << Copyright (2007) - All rights reserved. >>
> << ------------------------------------------------------- >>
========================================= MODERATOR'S COMMENT:
Please delete all non-essential parts of the post to which you respond.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by R. Pile on March 3, 2008, 4:43 pm
Please log in for more thread options
>
> Help us help you, what tax software are you using?
>
The program is TaxAct, but I presume the answers would be the same,
regardless.
>
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by removeps-groups@yahoo.com on March 4, 2008, 1:07 am
Please log in for more thread options
> Since it was received before April 15, 2007, the $12,000 was included
> as income (salaries and wages) on the 2006 tax return.
Was the 12k received during 2006, and was it included in the W-2 for
2006?
> She has now
> received a 2007 1099-R showing the entire $13,000 as taxable, but with
> a code "P," indicating it was taxable in 2006.
The taxable amount should 1k, right? If this seems to be the case,
contact your HR person at work.
Box 2a is not always correct. Is box 2b "Taxable amount not
determined" checked?
> What overrides do I need to enter to have this handled this
> correctly? Do I show $13,000 received, but only $1,000 taxable? Do I
> delete the 1099-R entirely? Is the $1,000 reported as pension or
> interest? Will an override eliminate the ability to file
> electronically?
No, messing with the program does not affect your ability to efile,
but it just messes with the software's logic (which is usually
right). You should probably enter the taxable portion as 1k, after
checking the points above.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
|
Posted by R. Pile on March 4, 2008, 10:17 am
Please log in for more thread options On Mar 4, 1:07 am, "removeps-gro...@yahoo.com" <removeps-
gro...@yahoo.com> wrote:
>
> > Since it was received before April 15, 2007, the $12,000 was included as
income (salaries and wages) on the 2006 tax return.
>
> Was the 12k received during 2006, and was it included in the W-2 for 2006?
====> No. The $13,000 was received in the form of a check in March
2007, after the 2006 W-2 was issued, with a letter explaining the
situation and the tax implications. A corrected W-2 was not
issued.
> > She has now received a 2007 1099-R showing the entire $13,000 as taxable,
but with a code "P," indicating it was taxable in 2006.
>
> The taxable amount should 1k, right? If this seems to be the case, contact
your HR person at work.
>
> Box 2a is not always correct. Is box 2b "Taxable amount not determined"
checked?
====> No. But it was my understanding that the excess contributions
were taxable in the year of the original contribution (2006, in this
case), but any earnings produced by the excess contribution were
taxable in the year they are returned to the taxpayer (2007, in this
case).
> > What overrides do I need to enter to have this handled this correctly? Do I
show $13,000 received, but only $1,000 taxable? Do I delete the 1099-R
entirely? Is the $1,000 reported as pension or interest? Will an override
eliminate the ability to file electronically?
>
> No, messing with the program does not affect your ability to efile, but it
just messes with the software's logic (which is usually right). You should
probably enter the taxable portion as 1k, after checking the points above.
====> Thanks.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
|
| Similar Threads | Posted | | Double entry and double taxation? | March 14, 2007, 12:03 am |
| Taxable SS double that of last year? | February 6, 2007, 10:36 pm |
| Re: Is Landlord Double Dipping? | April 16, 2008, 2:20 pm |
| Re: Is Landlord Double Dipping? | April 16, 2008, 7:33 pm |
| Re: Is Landlord Double Dipping? | April 17, 2008, 3:27 pm |
| Re: Is Landlord Double Dipping? | April 17, 2008, 4:38 pm |
| Re: Is Landlord Double Dipping? | April 23, 2008, 8:11 pm |
| Re: Is Landlord Double Dipping? | April 23, 2008, 8:48 pm |
| Avoiding the AMT | March 20, 2007, 3:05 pm |
| LLC taxation questions | May 25, 2007, 1:41 pm |
|
|
Yahoo! 
Google 
Windows Live 
del.icio.us 
digg 
Netscape 
XML Sitemap