Form 5329?

[SueBaby]

Client took his retirement out to pay his medical bills. On the form line 1 is retirement but line 2 is that the whole medical bills or the line 4 on the Sch A? Getting confused on form and line 4 what is the % of? Haven't had before. Thank you for info on this.

[BP.]

Client took his retirement out to pay his medical bills. On the form line 1 is retirement but line 2 is that the whole medical bills or the line 4 on the Sch A? Getting confused on form and line 4 what is the % of? Haven't had before. Thank you for info on this.

Your Form 5329 line 2 is the amount of medical expenses minus 7.5% of AGI, so, yes, it would be the amount on Schedule A line 4 if that is being filed. (Itemizing not required to use this exception.)

Form 5329 line 4 is 10% of the distribution remaining, if any, after applying the exception for the medical expenses.

Hope that helps you!

[Peachie]

What software package are you using?

Client took his retirement out to pay his medical bills. On the form line 1 is retirement but line 2 is that the whole medical bills or the line 4 on the Sch A? Getting confused on form and line 4 what is the % of? Haven't had before. Thank you for info on this.

My software has this flow to the correct line of the 5329 when you enter the info from the 1099R. Basically, you really don't have to use this form--if taxpayer is less than 591/2 and the distribution code is 1-you would take 10% of the taxable amount and place it on page 2 of the 1040, on the line representing the penalty. However, I am sure most packages does the form so that the flow is there. My software has no place for me to do a direct entry. I am not home and have none of my tax materials, so I am unable to be more detailed. Do you have TTB Sue? If so, I am sure this issue is addressed in there.

Peachie

[SueBaby]

My software has this flow to the correct line of the 5329 when you enter the info from the 1099R. Basically, you really don't have to use this form--if taxpayer is less than 591/2 and the distribution code is 1-you would take 10% of the taxable amount and place it on page 2 of the 1040, on the line representing the penalty. However, I am sure most packages does the form so that the flow is there. My software has no place for me to do a direct entry. I am not home and have none of my tax materials, so I am unable to be more detailed. Do you have TTB Sue? If so, I am sure this issue is addressed in there.

Peachie

Thank you BP and Peachie it helped. Yes, I read pages 3-8 and 13-3 but wasn't so sure about myself in figures and lines til talked to you. My software did not flow on that form had to manually put it, that is why I had to question about it. THANKS AGAIN!!