Form 8880 Question

[photoman]

I have a client that due to low income and retirement plan he normally shows a small credit on the 8880. His wife withdrew 2800 from her Regular IRA.

I am showing it as a withdrawal from qualified plans on the 8880 and this takes away the credit on the 1040. Does this seem to be the way to handle.

[KBTS]

Yes, disbursements from qualified plans are deducted from both taxpayer and spouse contributions before calculating the credit.

[Bill Tubbs]

sounds correct

With the limited facts you've submitted, it sounds to me that the IRA withdrawal would likely cancel any credit they've been used to getting.

Bill

[photoman]

The 2800 withdrawal from the spouse IRA did disallow any credit when I enter that number

Ron
And thanks for the help

[RitaB]

Yes

The 2800 withdrawal from the spouse IRA did disallow any credit when I enter that number

Ron
And thanks for the help

Yes, that's correct. Ka-put on the credit.

[Burke]

And how many people go back prior years to retrieve that information?

[RitaB]

Two

And how many people go back prior years to retrieve that information?

Two. I try to remember to enter all withdrawals on the 8880 every year for everybody, even people not in the income limits for the credit, but you know how

[RitaB]

It goes

Two. I try to remember to enter all withdrawals on the 8880 every year for everybody, even people not in the income limits for the credit, but you know how

...you get interrupted and stuff.

[FEDUKE404]

Think of

"you can't have your cake and eat it too....."

I have often wondered if a client, especially a new one, who "forgot" about prior/recent withdrawals from certain retirement plans, would ever get "noticed" by the IRS if filing such a Form 8880.

FE

[JohnH]

Kinda reminds me of the guy who thought his 1099R was wrong, but the trustee wouldn't change it. Trustees can be so obstinate sometimes. So he asked me what would happen if we just left it off his return altogether.

I replied, "I think I know but I'm not exactly sure about the timing You should whoever prepares the return when you take it to them."