Q. You mentioned last week that if you forgot to take the deduction for an IRA that I can file an amended return and take the deduction then. When I went to file the amended return, it limited my deduction. On $5,000, it only gave me a deduction of about $2,000. What happened?
A. You must already be an active participant in a retirement plan AND make more money than the IRS allows for a fully deductible IRA. Your income must have put you in a phase out range, allowing some of the deduction. What happens now on the amended return is that only part of the IRA is deductible and the rest is non-deductible. Report that amount on Form 8606. See FAQ 1-31-08.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
Friday, June 27, 2008
Friday, June 20, 2008
FAQ FRIDAY - June 20, 2008
Q. I put money into an IRA during 2007 and I forgot to take the deduction on my return. What do I do now?
A. You simply file an amended Form 1040 which is called a Form 1040X. Your explanation is that you inadvertently omitted the deductible IRA. Using software makes it easy to recalculate the return. You won’t have to file an amended Pennsylvania return because Pennsylvania does not recognize this as a deduction.
Tune in to Your Financial Choices tomorrow morning at 9 a.m. on NEWS TALK AM 790 WAEB or online at www.waeb.com for a conversation on "Tools To Use" in planning your financial life!
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
A. You simply file an amended Form 1040 which is called a Form 1040X. Your explanation is that you inadvertently omitted the deductible IRA. Using software makes it easy to recalculate the return. You won’t have to file an amended Pennsylvania return because Pennsylvania does not recognize this as a deduction.
Tune in to Your Financial Choices tomorrow morning at 9 a.m. on NEWS TALK AM 790 WAEB or online at www.waeb.com for a conversation on "Tools To Use" in planning your financial life!
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
Monday, June 16, 2008
Laurie's Appearance on Money Matters TV-Philly
Last week Laurie filmed a segment for Money Matters TV in the Philadelphia/New Jersey region.We have posted Laurie's segment on our webstite at: http://www.yourfinancialchoices.com/
We will also be posting the air dates and channels on our website for those within viewing range - please keep checking back! They were happy to have Laurie as a guest and will be looking to bring her back for a second show!
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
Friday, June 13, 2008
FAQ Friday - June 13, 2008
Q. You mentioned last week that there is a New Jersey Inheritance tax. What is the tax?
As I mentioned, the tax is based on to whom is inheriting the assets and the relationship to the decedent. There are different classes of beneficiaries in New Jersey and last week I mentioned Class A beneficiaries; they are exempt from inheritance tax. A brother or sister is a Class C beneficiary and the tax rate goes from 11% to 16% on assets passing to them over $25,000. A friend is an example of a Class D beneficiary and assets passing to them get taxed between 15 and 16%. The executor must review the requirements for filing and the classes of the various beneficiaries. In addition, while there may not be an Inheritance tax because of Class A beneficiary status, there may be a New Jersey Estate Tax. That tax is assessed based on the state death tax credit that would have applied under the December 31, 2001 tax code. For example, $2,000,000 passing to a child that is exempt for New Jersey Inheritance tax purposes will be subject to approximately a $99,600 New Jersey Estate tax. Be aware and consult an attorney for further guidance.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
As I mentioned, the tax is based on to whom is inheriting the assets and the relationship to the decedent. There are different classes of beneficiaries in New Jersey and last week I mentioned Class A beneficiaries; they are exempt from inheritance tax. A brother or sister is a Class C beneficiary and the tax rate goes from 11% to 16% on assets passing to them over $25,000. A friend is an example of a Class D beneficiary and assets passing to them get taxed between 15 and 16%. The executor must review the requirements for filing and the classes of the various beneficiaries. In addition, while there may not be an Inheritance tax because of Class A beneficiary status, there may be a New Jersey Estate Tax. That tax is assessed based on the state death tax credit that would have applied under the December 31, 2001 tax code. For example, $2,000,000 passing to a child that is exempt for New Jersey Inheritance tax purposes will be subject to approximately a $99,600 New Jersey Estate tax. Be aware and consult an attorney for further guidance.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
Friday, June 6, 2008
FAQ FRIDAY - June 6, 2008
Q. My father died and he was a resident of New Jersey. I am a Pennsylvania resident. What do I do?
If you are the executor of your father’s Will than you must administer his estate in New Jersey. It does not matter where you are a resident. For New Jersey Inheritance tax purposes, assets are taxed based on who is inheriting (similar to Pennsylvania.) If your father had assets in his name alone, you will still have to probate. You may not have to file an Inheritance tax return however. Depending on to whom the assets are passing, New Jersey allows a special Self Executing Waiver form called an L-8 or a Real Property Tax Waiver form called an L-9. These forms have been created for Class A beneficiaries who include the parents, grandparents, children and spouses. There are new laws to include civil union and domestic partners as well. Always consult your financial advisor and attorney.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
If you are the executor of your father’s Will than you must administer his estate in New Jersey. It does not matter where you are a resident. For New Jersey Inheritance tax purposes, assets are taxed based on who is inheriting (similar to Pennsylvania.) If your father had assets in his name alone, you will still have to probate. You may not have to file an Inheritance tax return however. Depending on to whom the assets are passing, New Jersey allows a special Self Executing Waiver form called an L-8 or a Real Property Tax Waiver form called an L-9. These forms have been created for Class A beneficiaries who include the parents, grandparents, children and spouses. There are new laws to include civil union and domestic partners as well. Always consult your financial advisor and attorney.
IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication, including any attachments, is not intended or written to be used, and cannot be used, for the purpose of 1. avoiding penalties under the Internal Revenue Code or 2. promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Securities offered through Valley National Investments, Inc. - an independent broker/dealer and member FINRA and SIPC.
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