Turbotax: What Was Your Experience Like?

[Kolombo]

Worst filing status for all tax payers is Married filing seperate hands down. Literally, you lose all your benefits cuz IRS assumes your significant other or you are cheating the system by choosing this.

I can't argue with that, I can think of a couple of good reasons couples would want to file married filing separately and the most obvious one would be to avoid an off-set or tax levy against a spouse. Even attaching the Injured Spouse or Innocence Spouse forms along with the 1040 will do very little in such cases. Good to know, thanks for telling me sxb.

There are a lot tax benefits for being 1st time home buyer. Federal Government is giving out $7K to $15K tax deductions based on your income and filing status in 2008 tax year. You can also save all or part of the acquisition and closing costs.

From what I read, the tax credit is for first time home buyers who bought a house between April 2008 and July 2009 and the maximum refund the IRS is giving is $7500 or 10% of the actual value of the home so long as the house cost less than $75k to purchase. This can be a great add-on for anyone purchasing a home these days, do you see people filing the 5405 to get this credit? Are Somalis taking advantage of this specially now that homes are cheaper to buy?

[Ladane21]

Man,

I don't really have Somali clients except my family memeber whom i file for free. I can not tell you if they are taking advantages of this tax incentives or not........You're right about 5405 form details for $7.5k or 10% but there are other deductions that boosts your adjustments namely acquisition and closing costs.

Only time you are allowed to use injured spose is when your spose had incured their depts prior your relationship and you don't want to be part of their prior lives.

[Kolombo]

Ladane,

I got another question for you. I have a some funds in my 403b (401k for public/non-profit institutions) that my department had invested for me last year. I wanted to take the funds out before they all get depleted due to the flactuating market, my question is; if I take out these funds, I will be penalized for taking them out and I will also be taxed, I will again be taxed when doing my 1040. Is there anyway to avoid the penalties and the heavy taxing? I've heard of companies that buy 401k/403b, keep the investments and then give you your acrued funds without any penalties. Are they legit? What do you know about this issue, sxb?

[AbdiWahab252]

Kolombo,

Best advice would be for you to roll it into an IRA. Once the money is rolled over, you can put it into cash in a money market fund.

Btw, if its with TIAA CREF, Get a Rollover IRA

[Ladane21]

Saxib,

1. If you're afraid that your 401K plan is invested in a voilatile investment organization, you can rolled out to another company that have stable fluctuations without any penalty or tax complications.

2. If you want to take out your 401K plan, ask the administrating company to withhelp your tax liability and estimated penalties. Your penalties shouldn't be more than 10%.

3. Use 1099-R when you're filing your taxes next year. You won't incuring any taxes if you choose option 1 or 2.


As for other companies that may give your money without hefty taxes and penalties. I have no clue.

Thanks

[Kolombo]

AW,

My 403b is annuity based contracts. Only reliable way to take out the funds without serious penalties is transferring them in to money market accounts and then periodically taking out the funds every fiscal quarter. I'm thinking of going with either Fidelity or Vanguard. Retirement funds are disappearing at a scary rate, its one of the reasons the markets are volative; lack of confidence.

3. Use 1099-R when you're filing your taxes next year. You won't incuring any taxes if you choose option 1 or 2.

That's what I wanted to know, thanks bro.

[AbdiWahab252]

Kolombo,

403Bs and 401Ks can be raided if the organization fails.

Becareful and always roll them out.

Is it parked at TIAA-CREF ?

[Kolombo]

No, its with Janus Mutual Funds. They forced us to invest them by March last year or risk penalties. I looked at my account a few days ago and saw I lost $6k since then, which is worrying me.

[AbdiWahab252]

Kolombo,

Hmmm.... You should have bailed before then. See what is the time period you have to be invested in this fund before withdrawing without any penalties ?

I then would withdraw into a Rollover IRA at TRowe, Vanguard or Fidelity. When you roll over your 403b, into a Roll Over IRA, you don't pay any taxes or penalties as you are still keeping the funds for retirement,

[Kolombo]

I'm closely studying between Vanguard & Fidelity. I submitted my papers last March to be locked in for 16 months without any penalties, that means I've to wait until this summer before I can move my funds.

More recently, I've been thinking about ditching the whole IRA route and just getting my money out. Then maybe buy a house as an investment. Remember those prices I gave you a few weeks a go for houses in my city? They're falling even more, but not for too long. Once the stimulus passes, economy will probably pick up again and so will house prices. I wanted to get in the business before this happens.

I've seen some companies advertising themselves that they can give me my money without any penalties, then they keep my funds invested without getting them out for a small fee. How legit are they? Ever heard of them?

[AbdiWahab252]

Kolombo,

Housing prices are going to be depressed for years to come. I wouldn't recommend incurring the 10% penalties, plus paying federal/state taxes on your lump sum.

You can actually borrow from your IRA to buy a house You just need to pay it back.

as for those funds, send me the links. They sound suspicious.

[Kolombo]

Ninyow, I don't want whatever is left of my money to disappear right before my eyes.

I'll shoot you a pm with my annuity info, maybe you can drop me some tips.

[AbdiWahab252]

Kolombo,

I am down 40%. Still, we got a long ways off for retirement.

My only regret is I never invested with some friends back home. $10,000 holding is now worth $60,000 over the past 2 years.