Thank you to both replys - I did find someone professional
that will be talking to her..I'll let you all know what she
finds out...

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(Mailed and posted -- please reply in newsgroup, even though
my participation is more intermittant than it has been in
the past.)

crowoman wrote:

- quote -

I think she should see a professional to ensure that her
2003 return was done properly. I don't think there's much
option for improvement in her current returns, but I could
be wrong.

Possible notes:

Her ex's retirement income is taxable. Any withdrawals from
her ex's 401k (probably now an IRA) are taxable, and may be
subject to early withdrawal penalties to some extent if she
is not considered totally and permanently disabled. Even if
she isn't, there is no penalty to the extent of deductible
medical expenses (see below). Social Security income is
almost certainly non-taxable and can be disregarded.

Her Medicare copayments, plus Medicare part B premiums, and
andy Medicare part A premiums which are deducted from her
Social Security income, are considered medical exprenses.
These are deductible to the extent they exceed 7.5% of
Adjusted Gross Income (probably equal to the gross income
calculated in the preceeding paragraph.)

Mortgage interest and property taxes are deductible.

If these, together with other deductible payments, exceed
the standard deduction for a single person ($4850 for 2004),
she may itemize deductions. (Whether or not she itemizes
deductions, the exclusion from tax penalty still stands.)
If her annual gross income (disregarding social security) is
$7950 or less, she doesn't need to file except possibly for
a form 5329 to properly report the tax penalty on the 401k
withdrawal.

On the other hand, your point 3 states "1/2 received in
2003". If that's her half of the proceeds, that's fine. If
it's half of her share, and she's still receiving payments
on it, that's a much more complicated tax issue.

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"crowoman" <crowoman[at]gmail.com> wrote:

- quote -

It's likely that she doesn't owe any Federal income tax, but
there isn't enough information in your post to give a
definite answer. The pension money she receives is probably
fully taxable, and the SSDI is probably completely tax
exempt.

If her non-SSDI income was $7950 or more, she has to file a
Federal return and probably owes some income tax. The state
taxable level may be less.

--
Phil Marti
Clarksburg, MD

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Hello - I have a friend who is still in shut down from
divorce, selling her home, mental and physical
problems...here's the facts and please give me your advice:

1. She is on Medicare A,B - "Disabled" 50 years old
2. Divorce finalized 2003
3. House sold - got 1/2 in 2003
4. Receiving 1/2 of ex's retirement (started 04) - lifetime
5. Received 1/4 of ex's 401K in 2004
6. Started purchasing a house (lives in now) Dec 31, 03
6. Monthly income is below $1,200 a month (SS & ex's retirement)

She also pays the 20% of her medical bills (that Medicare
doesn't pay) - which are stacking up - she has many health
issues.

So what I need to know is - does she have any kind of
opportunities for a positive income tax outcome or? I have
no idea how to help her as I am a simple 1040EZ telefile.

Thank you guys!!!!!!!!

Julia

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