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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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My mother gets about 15,000 in social security and another

Resolved Question:

My mother gets about 15,000 in social security and another 5,000 from other income. How much tax will she have to pay and does she qualify for the 200.00 rebate?
Submitted: 8 years ago.
Category: Tax
Expert:  Anne replied 8 years ago.

HiCustomer/p>

 

Thank you for using justanswer. Depending on what the other $5000 income is (specifically if it is some form of self employment for example) then she might have a tax liability. If the other $5000 is interest, dividends, or pension, then she shouldn't have a tax liability if this is her only income.

 

With $15000 in social security (not SSI), then your mother should be eligible for $300 stuimulus payment. Please see below.

 

Information on Stimulus Package

 

I hope this helps

 

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Customer: replied 8 years ago.
So, Do I add the $5000 to the $15000 on the tax form or do I only list the 15000? I do not quite understand the answer
Expert:  Anne replied 8 years ago.

Hi again Olenka

 

Please tell me what the source of the other $5000 is (pension?, bank interest? etc) and then I can give you an answer that I hope will be more clear.

Customer: replied 8 years ago.
The $ 5000 comes from a pention and CD interest
Expert:  Anne replied 8 years ago.

HiCustomer/p>

 

Thank you for that additional information, That helped alot. You will only need to file a Federal 1040A form for your mother, and you will only need to file it this one time in order for her to receive the stimulus payment. If not for this stimulus program, your mother would not have met the gross income filing requirement, and would not have needed to file a Federal income tax at all.

 

You would use a 2007 Form 1040A , and report her interest income from the CD online 8A

 

Her pension income would go on line 12A and the taxable portion on line 12B

 

Her social security income would go on line 14A only. With this little bit of income, none of her social security would be taxable.

 

If you have any other questions or need additional clarification, please let me know.

 

If you have found my answer helpful, please click the green "accept" button as it is the only way we get paid.

 

Positive feedback and bonuses are always appreciated.

Customer: replied 8 years ago.
Thanks and one more question.... How do I figure the taxable portion of the pention income? On one it says income and taxable amount is 498.00 and on the other it is 2821,44 income and taxable amount not determined.
Customer: replied 8 years ago.
Hi. Please answer my final question, directly above how do I figure out the taxable portion of the pension income? On one it says income and taxable amount is 498.00 and on the other it is 2821.44income and taxable amount not determined.Thanks, Helene
Expert:  Anne replied 8 years ago.

Hi Olenka

 

I apologize for the delay in answering this follow up question. We have been doing some major home renovations and unfortunately, the electrical system got knocked out for a few days. (Somebody missed their mark and cut the electrical service by mistake)

 

First, I assume you mean the amount is $2821.44

 

When you receive a 1099R that does not have any entry in the box that says "taxable amount" and a check in the box that says "taxable amount undetermined', the taxable amount depends on whether or not the person ever contributed to their retirement/pension plan while they were working.

 

If your mother never contributed to her retirement/pension plan, then all of the distribution is taxable.

 

If your mother did contribute to the plan, then you must spread the % she contributed vs the total $ amount in the plan over her life expectancy per IRS tables. I have supplied the links below that tell you how to do this from Publication 575 (2007), Pension and Annuity Income . However, given the small amount of money you stated your mother received, the truth is, it may not be worth going thru all the calculations. If you consider the whole amount as taxable, and your mother, after taking into account her standard deduction and personal exemption, has no tax liability, then does it really matter that only $2600 of her $2800 distribution (for example) was taxable?

 

Here are the links though just in case you wanted to calculate this out:

 

Cost (Investment in the Contract)

 

How to use the Simplified Method.

 

Again, I apologize for the delay in answering this. With any luck at all, my electrical problems should be over, and I should remain avalilable should you have any follow up questions.

 

 

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