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Lou
Lou, Tax Preparer
Category: Tax
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Experience:  25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
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This is for pretty well versed tax expert. I am doing the

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This is for pretty well versed tax expert. I am doing the taxes using a TaxAct CD, for a friend. I use TaxAct to do my and my friend's taxes. My friend's financial advisor sent her two 1099's, one a "DIV" model and a "B" model (sort to speak). In the DIV form, there are "Total ordinary dividends of $260.12 and Qualified dividends of $169.62, but, no "Federal Income Tax withheld." At what percent do I tax her two dividends? On the DIV type, she withdrew (5 redemptions) a total of $5808 but again no Federal income tax was withheld. Again, at what percentage shall I tax her redemptions? And this is the tough one, Mass Mutual sent her the last "Quarterly Statement," (this is not a 1099) showing a "Total Interest earned year to date of $599.95. Is this taxable even though it is not a 1099 (her contract value of this mutual fund is $15,364). Again, at what percentage should I tax her interest earned, if this is taxable?
Submitted: 5 years ago.
Category: Tax
Expert:  Lou replied 5 years ago.

Hello and thank you for contacting JustAnswer. We appreciate the opportunity to be of service to you.

 

If you are using TaxAct then you should be able to go to forms mode and enter the data directly from the 1099DIV to the TaxAct screen form. The software will compute the tax you do not have to. There is normally no federal income tax withheld from 1099DIV or 1099B forms,

 

I am not sure what you mean by 'redemptions' on the DIV. Can you tell me what box # XXXXX are in?

 

The last part of your question is interesting. You mention "interest earned year to date" but indicate it came from a mutual fund. Usually mutual funds do not pay "interest" they accumulate or lose value and pay dividends. Can you clarify that for me?

 

If itis in fact interest it is reported on line 8a of the tax return. Unless it is "tax exempt" it will be taxed at the taxpayers ordinary tax rate.

 

Lou, Tax Preparer
Category: Tax
Satisfied Customers: 404
Experience: 25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California
Lou and 2 other Tax Specialists are ready to help you
Customer: replied 5 years ago.
Concerning "redemptions" they are withdrawls from a company titled "The Income Fund of America" (A fund). There are no boxes in this 1099, but there are columns. There are six (6) columns, the first 3 are numbered "1a, date of sale or exchange," "7 (description," {listing telephone type redemptions}), "2" the "Dollar amount of transaction; and the last three (3) columns are not numbered but titled "Share price", "Shares this transaction", and "Federal income tax withheld." Okay, there is more information on the Mass Mutual Odyssey Quarterly Statement. This document indicates that it is a "Tax Sheltered Annuity." In the "Contract Summary" of this quarterly statement, there is a "Total Interest earned for period" is $141.90 and a "Total Interest earned year to date" is $599.95. Since it is not a 1099 and shows that it is a "Tax Sheltered Annuity," it appears to me that no taxes will be deducted on the interest earned. Is this correct?
Expert:  Lou replied 5 years ago.

What you appear to be describing is the statement of account one receives on a periodic basis (usually quarterly) with respect to a variable annuity.

 

The concept of a "Tax Deferred" Annuity is that the earnings will be tax deferred until distributed.

 

If there were no distributions taken from the annuity by your friend that information is exactly that "informational" and need not be reported.

 

The only time annuity transactions would be reported is if there were distributions (withdrawals) and they would be reported on a 1099R.

 

DId she in fact receive $5,808?

 

 

Customer: replied 5 years ago.
I think I confused you some. The tax deferred annuity you speak of is shown as a "Tax Sheltered Annuity" reported on "Mass Mutual Odyssey Quarterly Report" and no she didn't withdraw any amounts from these funds. The $5808 you speak of is in a totally different form, as I had mentioned to you, reported as "Redemptions" on a Form 1099-B from American Funds as I had previously mentioned, too. These redemptions (4 withdrawals of $2500, $1000, $1508, and $800) totaled $5808 again were shown on the American Funds 1099-B, subtitled Europacific Growth Fund A.   Okay, since you had previously mentioned that my TaxAct software program would take care of the 1099-B and 1099-DIV, and that the Mass Mutual Odyssey quarterly is not taxable unless withdrawals are taken (my friend did not take any withdrawals), then you have answered my questions and I believe this is worth $16.00. Thank you, XXXXX XXXXX
Customer: replied 5 years ago.
I think I confused you some. The tax deferred annuity you speak of is shown as a "Tax Sheltered Annuity" reported on "Mass Mutual Odyssey Quarterly Report" and no she didn't withdraw any amounts from these funds. The $5808 you speak of is in a totally different form, as I had mentioned to you, reported as "Redemptions" on a Form 1099-B from American Funds as I had previously mentioned, too. These redemptions (4 withdrawals of $2500, $1000, $1508, and $800) totaled $5808 again were shown on the American Funds 1099-B, subtitled Europacific Growth Fund A.   Okay, since you had previously mentioned that my TaxAct software program would take care of the 1099-B and 1099-DIV, and that the Mass Mutual Odyssey quarterly is not taxable unless withdrawals are taken (my friend did not take any withdrawals), then you have answered my questions and I believe this is worth not more than $16.00. Thank you, XXXXX XXXXX

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Lou
Lou
Tax Professional
404 Satisfied Customers
25+ yrs Experience Personal Income Taxes - Former DM for H&R Block in California