masteff

and how is this question different than the last several times you posted a nearly identical question? http://benefitslink.com/boards/index.php?showtopic=51250 http://benefitslink.com/boards/index.php?showtopic=51218 http://benefitslink.com/boards/index.php?showtopic=50454

This forum is generally used by benefits professionals to discuss the administration of benefits plans. We do not generally give advice such as you are requesting. Especially when we know absolutely nothing about your personal situation. I strongly suggest you consult with a competent professional tax advisor and possibly a professional financial planner. A fee-based (not a commission-based) financial planner can help you determine an investment strategy that fits your personal circumstances and personality. If someone is trying to sell you insurance products, then you should have a tax or financial advisor help you review the insurance product in question to be sure it will actually achieve your goals. It is my personal opinion to never trust an insurance salesperson, especially one that's telling me I should give them lots of money on which they will get a big fat commission; too many put that commission before your best interest. Good luck. Disclaimer: The above is a statement of personal opinion only; you are directed to form your own opinions and make your own decisions. I accept no responsibility for decisions you make from advice you solicited from complete strangers. If you still want complete strangers to tell you how to invest, then I suggest forums such as Motley Fool, a website which also contains many helpful articles about investing.

Also be aware that the health care reform law's preexisting condition rule will kick in on 1/1/2014. Which will make denial of coverage an even more tricky topic.

This is not uncommon. The reg says: "Expenses for (or necessary to obtain) medical care that would be deductible under section 213(d) (determined without regard to whether the expenses exceed 7.5% of adjusted gross income)" Make note of the phrase "or necessary to obtain"... in your scenario, the prepayment is necessary to obtain the medical care.

Possibly post #4 here? http://benefitslink.com/boards/index.php?s...2;2004-02\

60-day indirect rollover comes to mind.

Because the reg says "to prevent" eviction or foreclosure. If the taxes are due in the future, there is no eviction to prevent. You need the cause before you can have an effect; you have to be past due before you can have a threat of eviction. It is unfortunate but in my opinion unavoidable that the person might be forced as you note to incur penalties and interest. From reg 1.401(k)-1: "Payments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence" Edit: Of course we've proved on here a few times that people have varying standards on how strict to be hardships, so you should listen closely to your own personal and professional judgement.

Yes, I understood you were talking about the tax bill. Please reread my answer above. Edit: I suppose I didn't explicitly answer your question... the reg mentions both eviction and foreclosure. A mortgage goes hand in hand with a foreclosure. Whereas an eviction can result from many other causes, such as unpaid rent, tax debts, builders' liens, etc. To prevent either eviction or foreclosure, it's my opinion that it must be reasonably eminent and foreseeable from a currently exisiting fact pattern (ie, generally something must be unpaid and some form of past due notice with verbage about the consequences must have been received).

My opinion in prior threads about past due mortgages is there must be an element (such as a warning letter or notice) which now makes the risk of foreclosure or eviction imminent. You're looking for verbage to effect of "if you fail to pay this, we can and will start proceedings against you" (just be sure to ignore "polite" words like "please" and "thank you" if the other words are sufficiently threatening; courtesy does not make a demand any less of a demand). What I sometimes suggest in the case of deliquent mortgages is to call the lender and request a demand letter. If the past due tax bill in your hand is not sufficiently demanding, you might decide to have the participant call the tax authority and request a demand letter which specifies the penalty of failing to pay.

http://www.irs.gov/pub/irs-tege/roth_differences.pdf

It sounds like a Brazilian tax so you'd need a Brazilian tax advisor to determine if a US trust could be exempted. You might see if a US-Brazil tax treaty exists and if it addresses such entities. But given a small number of shares, the cost-benefit of such research may point you more quickly to the conclusion that it's simply an expense of the investment.

Seems to me like an event dreamed up by someone with a bad case of telecommuter envy. Besides, everyone knows the proper event for that day is "take a rack of barbequed ribs to your independent CPA who's been working 100 hours weeks for the last two months". It just failed to go mainstream because accounting students made fun of marketing majors all those years in college and now the marketing majors are getting revenge by not creating a catchy name.... like "Tickle your CPAs ribs day". Not to mention that CPAs halfway ruined the event by insisting on issuing gift receipts to their clients for deduction purposes which was just a buzzkill.

You might also talk to your investment firm... typically if you call in to their help line and ask to speak to an investment specialist, you'll get to someone w/ greater knowledge. Off the top of my head, recharacterize the contribution from Roth to traditional IRA. I would suggest you consider making it as a nondeductible contribution. You would need to file an amended 1040 to submit a Form 8606. Then you could convert from a nondeductible traditional IRA to a Roth this year, subject to the rules on conversions. End result, same amount of money in a Roth IRA. You should confirm the above is an option for your situation with both your investment firm and your personal tax advisor.

A) the response from the service said 4/17 B) many other returns normally due 4/15 are due 4/17 this year because today (4/16) is a legal holiday in the District of Columbia

I don't know the exact rules on the use of alternate/substitute forms, but sounds to me like that's what you have. As long as it clearly states that it is for income tax withholding purposes and is signed, I don't know why I'd deny it. And I agree that it's rare that the amount of withholding used for the gross-up is the same amount actually withheld. Just be sure your gross-up rates are reasonable for the taxpayer based on known facts (ie, eyeball their salary to pick their marginal tax rate).

The question is whether the person qualifies to report on Schedule C, rather than the normal Schedule E. This is a very difficult hurdle to leap. See Chapter 3 of IRS Pub 527 regarding "substantial services". See Chapter 5 of IRS Pub 334 regarding "real estate dealer". If they were really serious about it then I'd suggest they consult w/ a competent professional tax advisor to determine if they could qualify to report on Schedule C.

"full deductible" is the catch. Yes, can contribute to both SEP and traditional IRA. BUT, the SEP counts as an employer provided retirement plan so the deduction for the traditional IRA is subject to the income limits. From the bottom of page 31 here: http://www.irs.gov/pub/irs-pdf/i1040.pdf "Were You Covered by a Retirement Plan? If you were covered by a retirement plan (qualified pension, profit-sharing (including 401(k)), annuity, SEP, SIMPLE, etc.) at work or through self-employment, your IRA deduction may be reduced or eliminated."

You're creating a distinction that does not exist in IRS Code 72(t)(2)(A). The Code does not care what name the plan gives to the distribution. It merely cares that it is a distribution "made to an employee after separation from service after attainment of age 55". The word "after" denotes a threshhold, not a causality.

What about the "36+" part of the question? Can you have a different level for PS? Or are you saying both match and PS cannot be more restrictive than 1000 hours?

Ok, I went and dug up the more definitive answer. The document here http://www.jct.gov/publications.html?func=...own&id=2512 is the Joint Committee's General Explanation. They explicitly use the word "third person". It starts at pdf page 332, which in the document is numbered 324. And on 334/326 it discusses what constitutes a person for purposes of the provision. PL97-248 is here http://history.nih.gov/research/downloads/PL97-248.pdf but only provides the enacted code.

Using your labels.... But you have to read "any other person" in context of the whole thing. Person 1 is already noted as being "any person". If we put "any person" and "any other person" side by side, then it's very hard to say that Person 1 could be Person 3.

My three cents worth... 1¢ As you have concluded, a leasing organization can come in many forms. I once approved an engineer from a consulting firm as a leased employee. 2¢ If the person meets leased employee requirement (2)© then you have to start watching out for the contractor vs employee can of worms (thanks for spoiling that one, Microsoft!). 3¢ The analysis in a case like this sometimes comes down to the three points of the triangle... you, the person, and the third party "leasing organization". I took the hard and fast position that the person could not also be the third party. So that leaves owner-contractors completely out. If the person was obligated by the agreement mentioned in (2)(A), then the person isn't "any other person". Can you identify a proper third party?

I'm sorry, but you don't have choice in the matter. Here is the IRS guidance: http://www.irs.gov/pub/irs-regs/td9056.pdf (unless anyone knows of newer guidance that superceeds, but I didn't see any in the brief glance I took). PS: I disagree with your calculation of the loss attributable to your return of contribution... 5000 * [ (34175.87 - (35267.85+5000) ) / (35267.85+5000) ] = -756.43

Touché! my large plan keep-all-the-money-in-the-plan-that-you-can background came out in my choice of words.

See "Repayments" on page 9 here: http://www.irs.gov/pub/irs-pdf/iw2w3.pdf Looks like you do a W-2c to correct SS and medicare only (and then the 941 and all that fun stuff). And for the EE see IRS Pub 525 page 36 here: http://www.irs.gov/pub/irs-pdf/p525.pdf