"Katie" <katiej_1958[at]yahoo.com> wrote:
- quote -

Thanks Katie.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Victor Roberts wrote:

snip

- quote -

Right.

- quote -

Right again. Nor the interest either, alas.

Katie in San Diego

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I had taken early retirement from my employer of many years
in late 1999 and had started a consulting business. I was
therefore receiving my pension from my previous employer
even though I had not yet reached normal retirement age.

For tax year 2002 I switched tax preparation programs and
was in fact using two new programs in parallel to compare
their user interfaces and results. Both of the new tax prep
programs told me that a portion of my pension income was
eligible for the New York State pension and annuity income
exclusion. Both calculated that the amount eligible was the
limit set by NY State, which is $20,000. I had not seen this
exclusion when prepared my taxes for tax year 2001, so I
assumed it was a new law - and not the result of me reaching
some magical age or inaccurate calculations by two different
tax prep programs. How silly of me!

Well, yesterday I received a letter from the NY State
Department of Taxation and Finance. They audited my 2002
return and wanted additional documentation for the excluded
pension and annuity income paid to PERSONS OVER 59 1/2 YEARS
OF AGE. Woops! I didn't turn 59 1/2 until late in 2002, so
I now know was not eligible for the full amount of exclusion
claimed. I know I am at fault for not understanding the tax
law.

I assume that the additional state income tax I must now pay
for tax year 2002 will be listed on my federal return as a
2005 state income tax payment, since it will be paid this
year, and I will not have to go back and file an amended
federal return.

I also know that I will not be able to deduct any penalty
assess by New York State.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >