Dear Dr. Don,
I lost my job at end of March and I have to decide both what to do with my 401(k) and my lump-sum retirement money.
Several years back, we had to decide between two plans for retirement — one was getting the money at 65 (or whenever you retire) and the other was taking a lump sum at the time you leave the company.
Since I had not been there very long, I decided
Dear Tax Talk,
My question is regarding my boyfriend and his ex-wife. They are divorced with two daughters. His ex is a very difficult person to deal with, to say the least. She has taken him to court several times over the last five years. One of those times, she added that they will alternate the girls as tax-exempt on their tax returns. The judge granted this request.
For 2008, he was to claim his youngest (more…)
Dear Tax Talk,
I bought a CD in January of 2008 that matured one year later, on Jan. 29, 2009. My bank sent a 1099 for a portion of the interest in 2008 and said I would receive another 1099 for the balance of the interest at the end of 2009. I never took interest from this account until the maturity date, at which time I closed the CD and took both the principal and interest.
The reason I bought a 12-month (more…)
Dear Tax Talk,
My employer takes out about $300 a month for health insurance from my gross pay, and I am told that this is before taxes to save me money. However, when I get my W-2 form, all the money I pay for health insurance is included as “wages, tips and compensation,” so it really saves me nothing at tax time.
I have argued this point with them, but they say that they have to include it. I don’t believe (more…)
Dear Tax Talk,
We are an S corp that was formed in May 2008. We have two shareholders who contribute about three hours a day, five days a week on a regular basis. We had zero revenue with about $17,000 of losses in 2008. In 2009, we will probably be incurring another $23,000 loss. We will not make cash distributions to our shareholder nor will they get any sort of remuneration for their services. Do we have (more…)
Dear Tax Talk,
My daughter is 24 and a student in veterinarian school. She had $2,400 in income. She took out student loans for her tuition, about $17,000. My husband and I paid the balance of all her medical bills after insurance, bought food and supplies, gave her a car, bought clothes but certainly not more than that $17,000 she borrowed for her tuition. Can we still claim her as a dependent under the qualifying (more…)
Dear Tax Talk,
We have a newborn who needs constant home nursing care due to a tracheotomy. We normally would put the child in day care right now, but can’t. Are any of our expenses (nursing care, medical supplies, etc.) deductible in terms of the child care credit? The nurse basically acts as a nanny so my wife and I can work. I know medical expenses have to be beyond 7.5 percent of income to be deducted, (more…)