Re: ? Re Roth IRA Eligibility and Disability Income

In article <djo9jk02k70@xxxxxxxxxxxxxxxxx>,
Margaret Wilson <twokatmew@xxxxxxxxxxxxxxxxxxxxxx> wrote:
>Hello, Arthur!
>You wrote on Tue, 25 Oct 2005 18:18:31 +0000 (UTC):
>
> AK> Is there anything that allows a disability pension paid before
> AK> reaching the employer's minimum retirement age, and therefore
> AK> reported on Line 7, eligible for IRA contributions?
>
>Hmm, not having yet seen how my disability income will be documented, I was
>assuming that unless I recieve a W2, disability income should be reported on
>Line 21, Other Income, and listed on the accompanying work***. I'm
>expecting the disability *not* to be documented via W2, even though I pay
>federal and state income tax, as I no longer pay social security and
>medicare taxes on the disability income. (I paid social security and
>medicare taxes for the first six months, as required by law ... according to
>my insurance policy.)
>
>I've been doing my own (and friends' taxes) for years, and I'm accustomed to
>completing various schedules and forms, depreciation, etc. But this is the
>first time I've had to deal with unearned income, so I'm just finding my way
>here. Is there a tax publication on the subject?
>
>I use TaxAct, so I already have my 2005 preview software installed. To
>guestimate what my tax situation will look like at year's end, I just ran a
>Quicken report and then entered all income as a lump sum on Line 7. TaxAct
>complained that the amounts for social security and medicare tax are
>incorrect (due to the above). So if I end up having to report the
>disability income on Line 7 rather than 21, I may not be able to file
>electronically. Not that that's the end of the world....
>
>Regards, Margaret
>
>

The rule is this: if your taxable disability pension is paid to
you before the earliest date established by your employer for you
to receive a nondisability pension, then the income is reported on
Line 7 and not line 16.

Do not assume consumer software has produced the correct result.
--

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
.

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