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Question

Hello, I am married with 2 kids. My wife and I are both unemployed. We do not receive unemployment benefits. We do not have health insurance. My parents are deceased. They set up a lifetime annuity for themselves and it is now in a simple Saving and Investment Plan under my name. Anyway, the way it works is that whenever I withdraw money from this account, that money is taxed as if it were income. I have withdrawn 35,000 dollars this year. I am a day trader, and have made 30,000 dollars in small term capital gains. I have $4,000 dollars in medical expenses for my family this year. I have made a $2,500 dollar charitable contribution. What kind of taxes am I looking at for 2009? Thank you!

Submitted: 25 days and 23 hours ago.
Category: Tax
Value: $30
Status: CLOSED
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Posted by RD 25 days and 22 hours ago.

Info Request

How old are your kids?
Do you also own house- pay mortgage interest or property taxes?

25 days and 20 hours ago.

Reply

I own a house in Israel. I pay mortage there in shekel from an Israeli bank acct. Assuming 3.7 ratio of Shekel to dollar I will have paid roughly $5000 dollars in interest on the mortage this year. No property tax for this year. Twin girls, 17 months. Thx

Posted by RD 25 days and 18 hours ago.

Info Request

Are you a US resident or US Citizen? Are you currently in US?

25 days and 18 hours ago.

Reply

We are all US citizens. We moved to Israel in 2002, but we are back while are house is being built. We are living in Rockland County, New York (at my in-laws) since Sep. 2008. We purchased a house in Israel Aug 2007 and have been paying mortgage payments on it ever since (even while the house is being built). We expect to return to Israel in March 2010.

Posted by RD 25 days and 17 hours ago.

Answer

Your gross income will be $65000. After considering the standard deduction and personal exemption - the federal tax will be appx. $5000.
After considering the child tax credit of $2000 - your appx. federal tax liability will be $3000.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

25 days and 17 hours ago.

Reply

Thx. Just for clarity:
-my foreign mortgage interest is not deductible?
-small term cap gains are just ordinary income?
-how doe medical dedecuctions work. what percentage is deductible. (I will have more this year)

Posted by RD 25 days and 14 hours ago.

Answer

Foreign mortgage interest and medical deduction are not high enough. Instead you are better off claiming standard deduction.

Yes short term capital gains are taxed as ordinary income.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

25 days and 11 hours ago.

Reply

Thx RD, just one last question. Sorry to hound you. As for the medical deductions..
I need an outpatient operation on my knee. I am trying to decide whether to get it in the US, and if so, in which tax season. At what point would standard deduction be to my disadvantage. In other words, since i do not have health insurance, how much do i need to spend on medical expenses until I would make some money back as deductions....? this is the last question, and then I accept, thx for your patience.

Accepted Answer

Standard deduction for 2009 is $11,400.

Medical deduction over 7.5% of the adjusted gross income is deductible as part of itemized deduction on Sch A.


You are better off claiming standard deduction if your mortgage interest, medical expense(over 7.5% of Adjusted gross income), etc is over $11,400.

Let me know if you have any question.

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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Expert: RD
Pos. Feedback: 99.4 %
Accepts: 
Answered: 10/29/2009

Certified Public Accountant (CPA)

CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..

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