Taxgirl Posted April 12, 2011 Report Share Posted April 12, 2011 My client received a 1099R from her previous employer and the details are as follows: Gross Distribution: $8,976 Taxable Amount: Unknown Employee Contribitions/ Designated Roth cont. Or Insurance premiums: 2,077.94 Total Employee Contributions: $5,108 How much of this distribtions would be taxable? Thanks.....six more days till freedom! Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted April 12, 2011 Report Share Posted April 12, 2011 Has she received all of the disability payments she is going to receive yet? Or will she get more this year? How much is she entitled to or is it a matter of how long she is disabled that determines how long she receives payments? It appears from the information above likely that she has a basis in her disability payouts of $5,108. Since she has a basis, the payments may or may not be taxable. Since she got this on a 1099 instead of a W-2, I am inclined to think that the basis is applied to the payments. But without knowing more about her disability insurance plan, I really can't say for sure. Quote Link to comment Share on other sites More sharing options...
Taxgirl Posted April 12, 2011 Author Report Share Posted April 12, 2011 She is permanently disabled so she is going to be getting these payments every year. She told me that she contributed nothing to the plan and contributions were made by her employer (the post office). So....I am inclined to think that it is all taxable. Right? Thanks and and have a great day! Quote Link to comment Share on other sites More sharing options...
Gail in Virginia Posted April 12, 2011 Report Share Posted April 12, 2011 If she contributed nothing, then she has no basis, and yes the payments would all be taxable. Quote Link to comment Share on other sites More sharing options...
jainen Posted April 12, 2011 Report Share Posted April 12, 2011 >>she contributed nothing<< Maybe she didn't understand, because it looks to me like she contributed $5108 and (with additional information) can use the Simplified Method to exclude a percentage of each payment. Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted April 12, 2011 Report Share Posted April 12, 2011 I agree, use the Simplified Method to determine the percentage to exclude. Quote Link to comment Share on other sites More sharing options...
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