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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22990
Experience:  Taxes, Immigration, Labor Relations
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Good morning Lev. You stated that I can only give a " gift

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Good morning Lev. You stated that I can only give a " gift " of only 14,000 per year per person? If I give 1 amount to mom and another to 14 yr old son, is that ok?
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.

Lev :

Hi and welcome to our site!
Let clarify first...
You may gift any amount or any asset value as a gift - there is NO limit.
However you may gift only up to $14,000 per year per person WITHOUT ANY GIFT tax consequences.
If your gift is above that threshold - you would be required to file a gift tax return.
The limit "per person" applies to each donee.
You may gift $14k to your some and another $14k to your mother - and that will not trigger any gift tax filing requirements. However if you gift $15k to your son and $12k to your mother - you will be required to file a gift tax return.

Customer:

So I can give 2 checks less than 14k per year and that should suffice. I thank you again.

Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22990
Experience: Taxes, Immigration, Labor Relations
Lev and 5 other Tax Specialists are ready to help you
Expert:  Lev replied 1 year ago.
Yes - that is correct - you may make gifts to any number of persons - and as long as each gift will be not more than $14 per person per year - there will not be any gift tax consequences.
Gifts might be in form of the money, bank check, etc, or you may gift assets you own - in this case a fair market value of such assets is considered.
For instance - you may gift $14k to each of your 15 relatives - total $210k in 2013 - and still will not be required to file the gift tax return.
However - if you, for example, gift $15k to any single person in 2013 - the gift tax return would be required.
But if you make a gift $14 in 2013 and another $14k gift in 2014 to the same person - the gift tax return would not be required.
Customer: replied 1 year ago.


I SPOKE TO THE FIDELITY MEMBER AND HE SAID I WILL BE TAXED ON WITHDRAWAL. CAN I TAKE OUT 2 AMOUNTS OF 13,500 EACH YEAR AND NOT BE TAXED AT ALL? ACCORDING TO MY 401K REPR WHO SAID I SHOULD SPEAK TO TAX SPECIALIST. I ONLY HAVE SS RECEIPT EACH MONTH. I AM ALLOWED UNLIMITED WITHDRAWAL WITH MY PLAN. IF I REQUEST 2 CHECKS FOR UNDER 14K WILL I BE TAXED FOR ADDITIONAL INCOME? AM CONFUSED BY AGENT.

Expert:  Lev replied 1 year ago.
Distributions from 401k plan are taxable.
That is regardless of how you use the money.
That is up to you if you want to gift the money - but you will not DEDUCT the gift to any specific person. Only gifts to qualified charities are deductible.

When you contributed funds into 401k - such contributions were excluded from taxable income - correct? That means - your tax liability were deferred until funds are distributed. So when eventually you are taking distributions - the distributed amount is reported as your taxable income.

We may estimate your possible tax liability which is based on following:
your filing status? - single? HOH? other?
do you have any dependents?
your annual social security benefits?
any other taxable income?

Please provide above information - and I will estimate your possible tax liability.
Customer: replied 1 year ago.


AM DIVORCED NO DEPENDENTS $2,143.00 mo SS BENEFITS which is $25,716.00 annually NO OTHER TAXABLE INCOME

Expert:  Lev replied 1 year ago.
So - your filing status is single.
Assuming you are under 65.

If you take $30,000 distribution - your total federal tax liability is estimated as $4358
$25,000 distribution - $2971
$20,000 - $1643
$17,000 - $968
$15,000 - $643
$14,000 - $493
$12,000 - $200
$10,000 or below - no tax liability.
Customer: replied 1 year ago.


I was going to take 2 amounts of $13,500 each. So I will have to place 27,000 as income as well as my social security annual amount and be taxed. How unfair is that. I can never thank you enough.

Expert:  Lev replied 1 year ago.
To minimize your tax liability - you may take distribution partly now and partly after Jan 1, 2014 - so the second part will be counted toward 2014.
Thus if you take $10k now and $10k on Jan 2, 2014 - there will NOT be any tax liability.

If you take $27k distribution now - your 2013 tax liability is estimated as $3526
Yes - in this case a part of your social security benefits will be added to taxable income.
Specifically - out of $25,716 - $9479 will be taxable.
So your total Adjusted Gross income (AGI) is estimated as $36479
Minus standard deduction $6100
and minus personal exemptions $3900
So your expected taxable income would be $26479 - that amount is used to calculate your tax liability.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22990
Experience: Taxes, Immigration, Labor Relations
Lev and 5 other Tax Specialists are ready to help you
Customer: replied 1 year ago.


Thank you. Trying to help a mother and child is not easy. You are a true professional. Thank you.

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Lev
Lev
Tax Professional
22990 Satisfied Customers
Taxes, Immigration, Labor Relations