MargaretMort

Can IRA conversion done in one year before April 15 be credited to preceding tax year? You know, like making a contribution to an IRA before April 15 counts for preceding year? MM

Client has child attending college. The 1098-T shows payment received of $1770.58 and Scholarships or grants of $2388. Even adding in Books, etc., the costs don't equal the scholarship. Does that mean they have $400 or so taxable income instead of the $134 credit they think they have? As always, thanks for all your help. MM

Loved it and needed the laugh this morning. Nothing going right and I haven't even started. MM

My sincere thanks. I feel that I have beaten this thing to death and will be very happy when I can explain to them what has to be done. MM

I have been going through the pages and pages of paperwork left by the client who claimed the roll-over of a traditional IRA to a Roth in 2009. In 2010 they received the 1099-R showing the disbursement of the IRA which actually rolled over in April 2010. As far as I can determine, they each opened a Roth in 2009 and contributed money to it. The traditional IRA rolled into the Roth in 2010. SO--I need to tell them to do a 1040-X for 2009, taking out the roll-over information and properly reporting it on the 2010 return. Then they can pay the taxes owed on their 2011 and 2012 returns--or they can pay the entire amount with their 2010 return. I think I have this right. Any other suggestions? Thanks. MM

No, unfortunately. I have to assume this couple thought they could roll-over the IRA to a Roth in 2009 when his income was unusually low even though the roll-over didn't occur until 2010. The only thing I could compare it to was putting money into an IRA for the previous year up to the due date of that year's tax return. They are out of town at the moment so I can't ask them. Just wanted to be sure I wasn't over-looking something. MM

According to THE TAX BOOK, the child is her qualifying child and she can claim EIC. Have to do the worksheet. I haven't done one in years so I can't go further than that. MM

Aren't they wonderful! MM

Are conversions from an IRA to a Roth allowed only in the year of conversion or can you declare the conversion for the present tax year? For instance, conversion in 2010 reported and taxes paid with 2009 tax return? Thanks. MM

Oh, I agree the 2009 return is incorrect and the lack of an 8606 trail is questionable. According to their 2009 return they each show non-deductible contributions of $3000+ and paid taxes on $20000+ roll-overs. That is a lot of interest but whose to say they weren't correct. She, however, has no understanding of basis. I have told her I need to know how much they each contributed and she said she will get in touch with their broker person. She did tell me that their contributions couldn't be deductible because of gross income. Just out of curiosity, how do you apply the taxes paid in 2009 to the 2010 disbursement? I guess the 1040-X explanation? MM

Help!!!!!!!! Either I didn't state my problem clearly or I am missing an obvious answer. I am only concerned with the fact that the 1099R shows the rollover in 2010 and the taxes were paid in 2009. How do I show this? MM

New Client. They have always done their own income tax. In 2009 he was stationed in mid-East for several months and some of his pay was not taxable. They decided to convert their IRA, one each, to a Roth to "take advantage of his lower taxable income". They showed the changes on their 2009 1040 and paid the tax. The conversion was not accomplished until April 12, 2010. They have each received a 2010 1099-R showing the distribution. Do I report the 1099-R and add an explanation that the money was taxed in 2009? Personally, I think they have done the entire thing incorrectly. She told me that they had not put any money into the IRAs for 10 years and had been unable to deduct earlier contributions because of income phase outs. I assume they didn't use Form 8606 during those years to report the non-deductible contributions. I do know they used very small amounts-less than $50 each--as basis so they probably paid too much tax. Any helpful suggestions are so very much appreciated. I don't even want to talk with them until I have a clear understanding of the best way forward. MM

I used to do a lot of different needlework projects while I watched TV--felt that I had to do something worthwhile while vegging. I watch very little TV now so my needlework projects have fallen away. I really enjoyed counted cross stitch. Now I work at playing golf and volunteering at the AF base pharmacy. After this season I will start volunteering at the local public library and who knows what else. MM

Thanks, made my Irish self laugh. M

What I did was bunny hop from L. 21, scroll down the list of reasons to the blank lines at the bottom and enter the amount from the 1099 with a short explanation that Box 7 was incorrect, should have been Box 3. MM

When I asked a similar question, KC said to put it on Line 21 and explain it was for a prize and Box 7 was incorrectly marked. I did that, the e-file was accepted. MM

The old saying of "There are none so blind as those who will not see" fits me only I saw the dates, just didn't put them into context. Thanks to both of you for your help. MM

Client had an IRA through work, company wanted to not fund any more so she rolled it into a Roth. I can't seem to get the 2010 tax showing on the 8606 to add into the taxes for the rest of the income. Come to think of it, I don't see the IRA income on line 15-b. As I understand it, the client had no basis in the IRA so the income should be fully taxable, the only thing is whether to pay all the tax owed this year or split it with next year paying half. So far I have worked through the 8606, all the figures are there but nothing is transferring to the 1040. As always, any and all help is so very much appreciated. I am sure the answer is a very simple one but I can't find it. MM

I just deleted an email from IRS saying they had fixed the 4868. MM

Thank you all. I will check on Student 2 for 2009. I am happy to report I slept much better last night. MM

I have read and re-read the information that came with the 3 1098-T statements and this is what I think I am supposed to do: Student 1 has $2346.66 payments for his final semester for his 4 yr. degree, no scholarships, etc. All of this is eligible for whichever credit works best. Student 1 has $15486 payments for his first year of graduate school and $14896 in scholarships, etc. The $590 difference would be eligible for lifetime credit. Student 2 has $5832 payments for 2010 school year and $5188 in scholarships, etc. The $644 difference would be eligible for whichever credit works best. Student 2 has $4791 adjustment made for a prior year qualified charges, etc. No credit was taken in the prior year so that is a moot point. Is that correct or am I over-thinking the situation? Any and all help will be much appreciated. MM

Child #1 paid $2346.66 to first University. For advanced degree at 2nd University, paid $15486 and had scholarship or grants of $14896. I know this would go to Lifetime, seems to me it was better to use Lifetime for the first amount, also. Child #2 paid $5832 with adjustments made for a prior year of $4792 and Scholarship or grants of $5188. I haven't dealt with these before. Seems to me that scholarship or grants would be netted against fees paid. Am I right or wrong? And I have no idea what one does with the adjustment for a prior year. Thanks for any help. I feel like a babe in the woods this year instead of an experienced tax preparer. MM

Clients have 2 kids. #1 graduated in May with degree, has gone on to another University for advanced degree. They can take whichever credit is best for them for tuition for the Jan to May of 2010 term. Am I understanding this correctly? He also has a 1098-T from 2nd University for the fall of 2010 and spring of 2011. I am assuming they can not take that. #2 has tuition and related expenses amounts, adjustments for a prior tax year and Scholarships and Grants. To be perfectly frank, the Box 2 amount and the Scholarship amount are nearly the same but I would assume you would net them and use whatever works for a credit. Any and all help will be appreciated. MM

How does each person report the 1099S? Split it, report the entire amount? My mind has been chewing on this in between all the other things I was thinking about or doing and I can't come up with an answer. You all are wonderful with sharing, thanks so very much. MM

I knew there was a simple way to do this. I will follow KC's suggestion and maybe get a POA if necessary. Sure wish the companies would get this right in the first place. Again, my sincere thanks. MM