On Mar 4, 10:10 am, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:

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Actually, it may be necessary to file an amended return for 2006 and
report the 12k in line 7 (wages). But there would likely be
underpayment penalties on 12k. Seems unfair. But then again because
of 12k less income in 2007 you could qualify for the stimulus check if
you weren't previously qualified. I wonder if you could report the
whole thing in 2007 on the basis that you're a cash basis taxpayer,
but the rules suggest no as the excess deferral did happen in 2006.
In the 2007 return report the 1k earnigns and any withholding in box
4. See http://www.irs.gov/pub/irs-pdf/i1099r.pdf, all of page 5.
Seems you should have received two 1099-R's -- one for the excess
deferral with code P (to be used on the 2006 return) and $0 in box 4,
one for the earnings with code 8 (to be used on the 2007 return) with
some value in box 4, and there should be no IRA withdrawal penalty in
2007. Regarding TaxAct, I'd recommend that when entering the 1099-R
info, just set box 1 and 2a to $1000.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

<removeps-groups[at]yahoo.com> wrote in message
news:25a82c0e-d089-44b4-ada0-a1c178a885c2[at]s8g2000prg.googlegroups.com...
- quote -

If not reported already in 2006 then amended return(s) should be filed for
Federal and State.



- quote -

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 4, 7:17 am, "R. Pile" <michael.br...[at]wdn.com> wrote:

- quote -

Well, if the 12k wasn't reported in the 2006 return, then it should be
reported in the 2007 return. Is Box 4 (federal tax withheld) non-
zero? If not, then you may have an underpayment penalty for 2007.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"Paultry" <afn02552at[at]afn.org> wrote in message
news:R5idnVYem5AC6VDanZ2dnUVZ_tOtnZ2d[at]centurytel.net...
- quote -

In addition entering the code P from the 1099-R should not have resulted in
any information flowing to the 2007 tax return. This is how my tax software
behaves.
All software programs are not the same.

- quote -

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

R. Pile wrote:
Will an override eliminate the ability to file
electronically?
- quote -

My experience with TaxAct is that overriding an item
directly on the 1040 will generate a warning that the return
CAN'T then be efiled. The warning recommends making
changes on the supporting form(s). TaxAct technical support
would probably want to be made aware of this problem so they
can consider a correction or work-around.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 4, 1:07 am, "removeps-gro...[at]yahoo.com" <removeps-
gro...[at]yahoo.com> wrote:
- quote -

====> No. The $13,000 was received in the form of a check in March
2007, after the 2006 W-2 was issued, with a letter explaining the
situation and the tax implications. A corrected W-2 was not
issued.


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====> No. But it was my understanding that the excess contributions
were taxable in the year of the original contribution (2006, in this
case), but any earnings produced by the excess contribution were
taxable in the year they are returned to the taxpayer (2007, in this
case).


- quote -

====> Thanks.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

On Mar 3, 9:06 am, "R. Pile" <michael.br...[at]wdn.com> wrote:

- quote -

Was the 12k received during 2006, and was it included in the W-2 for
2006?

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The taxable amount should 1k, right? If this seems to be the case,
contact your HR person at work.

Box 2a is not always correct. Is box 2b "Taxable amount not
determined" checked?

- quote -

No, messing with the program does not affect your ability to efile,
but it just messes with the software's logic (which is usually
right). You should probably enter the taxable portion as 1k, after
checking the points above.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

- quote -

regardless.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"R. Pile" <michael.bratt[at]wdn.com> wrote in message
news:58bef51f-5f71-4832-86fa-f755e7eade91[at]13g2000hsb.googlegroups.com...
- quote -

Help us help you, what tax software are you using?


- quote -

Please delete all non-essential parts of the post to which you respond.

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In 2006 a client contributed the maximum allowable to her company's
401(k) plan. In March 2007, she received a "refund" of approximately
$13,000+ from the plan administrator, since the plan was found in
violation of the Highly Compensated Employee rules. Of this amount
withdrawn from the plan, approximately $12,000 was her contribution
and another $1,000 was earnings on her contribution.

Since it was received before April 15, 2007, the $12,000 was included
as income (salaries and wages) on the 2006 tax return. She has now
received a 2007 1099-R showing the entire $13,000 as taxable, but with
a code "P," indicating it was taxable in 2006. When I enter this
information into my tax software, it includes the entire $13,000 on
the pension line as taxable in 2007. Only the earnings of $1,000
should be taxable in 2007; the $12,000 balance was reported and taxed
in 2006.

What overrides do I need to enter to have this handled this
correctly? Do I show $13,000 received, but only $1,000 taxable? Do I
delete the 1099-R entirely? Is the $1,000 reported as pension or
interest? Will an override eliminate the ability to file
electronically?

--
<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >