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Question
I lost my husband July 2009. I had to sell shares of stock to cover a margin call on my now deceased husband's brokerage account to the tune of $33K. Upon his passing, I lost his monthly income in the tune of $3700. He also left me with $50k in other debts, which I could not make monthly payments on. My monthly income is $2800. So to keep my house and household in tack, I took an additional $47k from my IRA minus the 10% penalty (I am 57) and 20% federal tax to eliminate his debt. I tried refinancing my home, but my debt to income ratio was off the charts with the loss of my husband's income. I was told by three lenders that I had to eliminated most of the $50k debt before they would refinance my home. That said... I want to gift a city lot valued at $14k to a charity to help off set my 2009 tax burden. I know I will be able to file married for the last time. Question: What more can I do before the end of the year to reduce my certain tax bill for 2009?
Submitted: 42 days and 11 hours ago.
Category: Tax
Value: $28
Status: CLOSED
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State/Country relating to Question: Ohio
Already Tried:
Reduce my debt to income ratio to qualify for refinancing my home to half the current monthly payments. Looking for a job!
Accepted Answer
XXXXXXXXX, You may consider contributing to a traditional IRA. That may save you a significant amount of money in taxes. Additional charitable contributions may save you money in taxes. If you have job related expenses that are not reimbursed, you can use them to reduce your taxable income as well. Those are some ideas. There may be other options for you that your tax professional would be able to identify best by sitting down with you. Please let me know if I can assist you further. I am sorry for your loss.
Expert:
TaxMomNJ
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Answered:
10/11/2009
Tax Advisor
5 years experience with tax preparation company, over 200 hours of tax courses taken
42 days and 4 hours ago.
Reply
My income is via a pension, does it qualify in IRA contributions? I understand I can contribute as much as $6k this last time due my marriage status in 09. If I can gift the lot to a charitable organization, is the whole among tax deductible?
Accepted Answer
XXXXXXXXX,
No, unfortunately, you cannot contribute to an IRA with your income being from a pension.
These are some of the exceptions that will relieve you from paying the early penalty distribution.
You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.
The distributions are not more than the cost of your medical insurance.
You are disabled.
You are the beneficiary of a deceased IRA owner.
You are receiving distributions in the form of an annuity.
The distributions are not more than your qualified higher education expenses.
You use the distributions to buy, build, or rebuild a first home.
The distribution is due to an IRS levy of the qualified plan.
The distribution is a qualified reservist distribution.
I don't know if any of these apply to you but it may help.
Expert:
TaxMomNJ
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Answered:
10/12/2009
Tax Advisor
5 years experience with tax preparation company, over 200 hours of tax courses taken
42 days and 4 hours ago.
Reply
The only one that fits me is the beneficiary of a deceased IRA owner. Where can i learn more about that option?
Accepted Answer
XXXXXXXXX,
Here is the IRS website for tax considerations for seniors (pertaining to retirement income: http://www.irs.gov/publications/p575/ar02.html#en_US_publink10004541.
If you look at the early distributions section, you will see more information. It would appear that the money would have had to come from the IRA that you are receiving for your husband.
Thank you for your kind bonus and please let me know if there is anything else I can assist you with.
Expert:
TaxMomNJ
Pos. Feedback:
100.0 %
Accepts:
Answered:
10/12/2009
Tax Advisor
5 years experience with tax preparation company, over 200 hours of tax courses taken
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