NT / Wow, that's refreshing

[RitaB]

New guy had me looking over 2009. I spotted where previous preparer put annuity on line 7, which caused taxpayer to get MWP credit when nobody worked. He owes IRS $515.

I'm thinkin: He's outta here.

He thanked me, hired me to amend 2009, and prepare 2010.

Am I on candid camera?

[joanmcq]

Was it coded '3' for disability? If you are paid disability before normal retirement age, it does go on line 7.

[spanel]

Was it coded '3' for disability? If you are paid disability before normal retirement age, it does go on line 7.

I believe then it should have been on a w2 if that was the case.. when they reach retirement age, they move it over to a 1099r.

Chris

[RitaB]

Ah, sweet!

I will have to do some more investigating. Thank you. I believe it may have been a 3.

Glad I posted that. I love you guys!

[Burke]

I believe then it should have been on a w2 if that was the case.. when they reach retirement age, they move it over to a 1099r.Chris

Nope, in certain cases like civil service, it is properly on a 1099R coded "3." Treated as wages on Line 7 prior to minimum retirement age. When they reach the retirement age, it is still on 1099-R, just coded "7."

[Gary2]

Nope, in certain cases like civil service, it is properly on a 1099R coded "3." Treated as wages on Line 7 prior to minimum retirement age. When they reach the retirement age, it is still on 1099-R, just coded "7."

Or not. I've seen CSA-1099Rs that continue to be coded 3, even after minimum retirement age (but before age 65). Curiously, they show recovery amounts.

[joanmcq]

You don't start getting recovery amounts until after normal retirement age. I guess they forgot to change the coding! I don't have any idea of how you would contact OPR to get it changed...

[ToledoEd]

If the annuity was from Ohio Public Employee Retirement System, they only use codes 2 and 7 in box 7, If you read the instructions that they send it tells recepients that for those on disability pensions their tax preparrers will tell them it should be a 3, but they don't use that code. It does instruct them to put disability pensions on the W2 line until normal retirement age.

[RitaB]

Well, well

I found out it is a CSA-1099-R, is disability and coded as such (I am always suspect of codes, because they are often incorrect), taxpayer was 64, and had 20 years experience.

Publication 721, page 52 says:

Retirement under the Civil Service Retirement System (CSRS).
In most cases, under the CSRS, the minimum combinations of age and service for retirement are:

•Age 55 with 30 years of service,
•Age 60 with 20 years of service,
•Age 62 with 5 years of service...


The gentleman agreed that that was what he understood to be correct, also. So, the preparer should not have entered the annuity on line 7. Thank you all, I have learned something here. Glad it's a nice man who didn't go postal on me. Arr. Arr.

[RitaB]

Oy vey

Well, he MAY go postal. He has a 52,000 loss carryover to 2010.

Me: What did you sell to have this big loss? (Wait for it.)

Taxpayer: Personal residence.


Startin to think the 2009 tax preparer wasn't as good as us.