How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Jax Tax Your Own Question

Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1376
Experience:  JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
59761513
Type Your Tax Question Here...
Jax Tax is online now
A new question is answered every 9 seconds

Hello, I am a 58 year old male who is getting a legal separation

Resolved Question:

Hello,

I am a 58 year old male who is getting a legal separation from my wife of 10 years. She is 59.

As part of our legal separation agreement, I will liquadate a large part of my IRAs ($250K) and transfer them to my wife. The plan is to also give her a lot of our combined debt ($155K). She will use the funds to eradicate the debt.

My understanding is that as soon as the legal separation is granted, I can transfer the IRA funds to her without incurring a 10% penalty.

She is a nurse who earns about $75K per year. I will keep our house. I believe that she can still claim her son as a dependent since he is 23 and is supported by her (us).

I need to estimate my wife's tax burden for 2011 since we will no longer be married before the end of the year (we will be legally separated).

It is my understanding that we can not file jointly. Can we each file as head of household?

Also since the bulk of the money is going to pay bills, is there any tax break that my wife can claim?
Submitted: 3 years ago.
Category: Tax
Expert:  Jax Tax replied 3 years ago.

Jax Tax : First lets start with the IRA. You are not cashing it out. If you do, you will pay the 10% penalty and tax on the entire withdrawal. She will not pay any tax. What is likely the situation is that the IRA is being split and put in her name. No tax, no penalty but it would be an IRA in her name. If she cashes it out prior to 59 1/2 she will pay tax and penalty. If after, only the tax.
Jax Tax : Her son. Unless he makes less than $3700 in 2011 or is permanently disabled, he cannot be claimed as a dependent.
Jax Tax : Third, unless you have a dependent, you file Single not head of household. You must have at least one dependent to file head of household.
Jax Tax : The combined debt will have no bearing on tax unless.we are.talking about mortgage.interest which can be expenses by the person paying it.
Customer:

My wife's son earns less then $3700. He is a student. The same is true for my son. I assume that we both can then file as head of household.

Customer:

Also how much would the tax be for her (regardless of the penalty) if she cashed out.

Customer:

I'm still here.

Customer:

Sorry I'm new at live chat.

Jax Tax : It depends on her tax bracket. Add earnings to withdrawal and subtract 10k. Then look at the tax bracket chart here. http://www.bargaineering.com/articles/federal-income-irs-tax-brackets.html
Customer:

Thankyou.

Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1376
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
Jax Tax and 4 other Tax Specialists are ready to help you
Expert:  Jax Tax replied 3 years ago.
What Happens Now?

Your chat has ended, but you can still work with your Expert to get an answer to your question if you have not yet received one.

Come back to this page at any time to see additional information from your Expert.  You will also receive an email when your question is updated.  If you want to send a message to your Expert, use the box below.

If you have already received a satisfactory answer to your question, click the Accept button above.  Experts are credited for each accepted answer they provide.
Expert:  Jax Tax replied 3 years ago.
Let me know if you need additional help.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.