Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

IfI cash in a traditional IRA and pay the taxes on it, can I…

Customer Question
IfI cash in a...

IfI cash in a traditional IRA and pay the taxes on it, can I spread the income amount out over 5 years ..... to show my income decreased annually? If I show the whole amount as income then my medicare part B rate increases for 1 year

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

No thank you

Submitted: 7 months ago.Category: Tax
Show More
Show Less
Ask Your Own Tax Question
Answered in 6 minutes by:
12/14/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,678
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified

Income averaging is a federal tax code provision allowing fishermen, farmers and some retirees to spread their income over a period of years rather than paying a large sum in a single year.

...

It shields fishermen and farmers from the variability of their vocations, allowing years of low income to balance out years of high income.

...

For pensioners, it creates flexibility in how they treat lump-sum payments from retirement plans. Income averaging was available to a wider cross-section of taxpayers before the 1986 Tax Reform Act, which narrowed the provision to its current form.

...

SO it MAY be that you can (And five years comes into the equation, but it's averaged over 10 years if you qualify).

...

People born before 1936 who have been in their tax-deferred retirement plan for at least five years and who take out the entire balance in their plan in a single distribution, may be able to use 10-year income averaging to spread the tax bite over a 10-year span. The IRS would assume the account balance was paid in 10 equal annual installments and set the annual tax liability accordingly.

Ask Your Own Tax Question
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 7 months ago

Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit" – That’s the only way I’ll be credited for the work.

I hope you’ll rate me based on my accuracy and thoroughness (as opposed to any good news/bad news content). Thank you!

..

But again, if you need more on this, or if I've not understood your question correctly, please let me know.

Lane

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, to clients on three continents, since 1986.

Ask Your Own Tax Question
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask Lane Your Own Question
Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 14,678
14,678 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

Lane is online now

A new question is answered every 9 seconds

How JustAnswer works:

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

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.WMatteson, 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.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, 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.

OrvilleHesperia, 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!!!!

AlexLos 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.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
My husband and I surrendered a whole life in's policy for
My husband and I surrendered a whole life in's policy for income over 5 yrs. We received 2 1099R forms. One form showed policy surrender gross dist. Of $34,837, with $18,688 taxable, fed tax withheld$… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,494 satisfied customers
Will my IRA distribution in 2016 impact my Part D premium? I
Will my IRA distribution in 2016 impact my Part D premium? I was told that receiving an IRA distribution wouldn't be counted as income when calculating what I pay for Part D. But as I read other info,… read more
Tax.appeal.168
Tax.appeal.168
Principal
13 satisfied customers
I want to convert $200K of traditional IRA to $200K of Roth
Hi. I want to convert $200K of traditional IRA to $200K of Roth IRA in 2017. I have a K1 $150K loss in 2017. Will my AGI be affected in this way $200K - 150K = 50K added to AGI for 2017? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
ROTH 401k questions 1. Is the $18,000 amount the after tax
ROTH 401k questions1. Is the $18,000 amount the after tax amount you can put it or it is whatever's left of the $18,000 after taxes?2. When you put in your contribution amount is the % based off your … read more
emc011075
emc011075
Tax advisor and Enrolled Agent
Bachelor\u0027s Degree
3,094 satisfied customers
I recently retired from public schools. I was informed My
I recently retired from public schools. I was informed My accountant that I would have to transfer monies that I had in a TSA(tax shelter annuity) , which was with my employer to an IRA. Because I wou… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
1. Can I still convert my traditional IRA to a Roth IRA via
1. Can I still convert my traditional IRA to a Roth IRA via the 2010 high income exemption (just pay taxes, no penalties) and pay the taxes over two rather than three years? 2. Can I convert my self-d… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
I am 64 years old. I am retired and have current taxable income
I am 64 years old. I am retired and have current taxable income of about $68,000 per year. I have a total of $203,000 in 6 separate Traditional IRA CD's; the CD's have maturity dates over the next 3 y… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
I HAVE A SITUATION WITH A CLIENT, IVE NEVER HAD BEFORE. PLEASE
I HAVE A SITUATION WITH A CLIENT, I'VE NEVER HAD BEFORE. PLEASE WALK ME THROUGH THIS. SHE HAS TRANSFERRED HER TRADITIONAL IRS INTO A ROTH IRA. SHE TELLS ME SHE HAS TWO YEARS TO PAY TAXES ON THE CONVER… read more
Wendy Reed
Wendy Reed
Master Tax Advisor Enrolled Agent
Master\u0027s Degree
3,197 satisfied customers
I moved money from a Traditional IRA this year knowing the
I moved money from a Traditional IRA this year knowing the tax could be spread over 3 years. What is the current tax that will have to be paid on it this year and how would a change in the tax law whi… read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I have to withdrawal money out of my retirement account. How
I have to withdrawal money out of my retirement account. How much tax should I have withdrawn?… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
Hey Bill. Its me again. The retired postal worker at 63
Hey Bill. It's me again. The retired postal worker at 63 in July 2006. One more Question. Does a withdrawal from my IRA affect my Medicare B Benefits? I am now thinking about a $20k withdrawal from my… read more
Bill
Bill
Master\u0027s Degree
3,132 satisfied customers
I make over 120K/ annually. I max out my 403b contribution
I make over 120K/ annually. I max out my 403b contribution $16,500 annually and my company also puts aside money for my retirement in a 401A defined benefit plan. I would like to put money into an IRA… read more
Bill
Bill
Master\u0027s Degree
3,132 satisfied customers
In 2010 I would like to roll over my 403(b) into my Roth IRA.
In 2010 I would like to roll over my 403(b) into my Roth IRA. I would like to do this in two parts: one part would be 1/3 of my account. I would like to have that 1/3 count toward taxable income in 20… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
My mother recently died and left my brother and I with a 401k
My mother recently died and left my brother and I with a 401k valued at $400,000. This account represented her entire estate. We will split this money 50/50. I live in washington he lives in illinois.… read more
Merlo
Merlo
Tax Consultant
558 satisfied customers
retired but in drop system getting ready to leave after 1 year
retired but in drop system getting ready to leave after 1 year in drop about 40,000 only 54 almost 55 moving to florida should i rollover my drop money in my retirement pension or a money market but n… read more
Bill
Bill
Master\u0027s Degree
3,132 satisfied customers
I will be inheriting $216,000 from an IRA. If I take the ...
I will be inheriting $216,000 from an IRA. If I take the cash, what is the tax figure that I'll owe in April? My annual salary/income is $49,000.… read more
Bill
Bill
Master\u0027s Degree
3,132 satisfied customers
Tax strategy to use when there is a significant increaase in taxable i
I am in charge of my mother's finances. She is 78 years old. We are now in a position that we have to withdraw large sums of money from her IRA, which is 100% taxable. Her taxable income will jump fro… read more
Lev
Lev
Retired
Bachelor\u0027s Degree Equivalent
27,134 satisfied customers
I inherited an IRA from Parent. Can I roll it into my IRA ...
I inherited an IRA from Parent. Can I roll it into my IRA or do I have to cash it out and pay tax ?… read more
Sandi Hargrove, SkyHawks
Sandi Hargrove, SkyHawks
Master Tax Pro and Enrolled Agent
Master Degree
1,254 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x