Allen, 32 years old, withdraws $25,000 from his traditional IRA account which he plans to deposit into an IRA with a different bank. During the 60-day rollover period, he gambles and loses the entire amount. What income and/or penalties he must show on his tax return related to his failed rollover?
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Allen, 32 years old, withdraws $25,000 from his traditional IRA account which he plans to deposit into an IRA with a different bank. During the 60-day rollover period, he gambles and loses the entire amount. What income and/or penalties he must show on his tax return related to his failed rollover?
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- Joy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.Jake is an IRS tax law - certified volunteer preparer at a VITA/TCE site. When preparing a return for Jill, Jake learns that Jill does not have a bank account to receive a direct deposit of her refund. Jill is distraught when Jake tells her the paper refund check will take three to four weeks longer than the refund being direct deposited. Jill asks Jake if he can deposit her refund in his bank account and then turn the money over to her when he gets it. What should Jake do?Jeremy, age 38, has $25,000 in a traditional IRA account and is considering taking the money out to buy himself a new car. What will be the tax consequences to Jeremy if he withdraws the $25,000 from his IRA in 2018 for this purpose? Explain
- Sansa opened a savings account in 2020 and deposited $8,000. She received $200 of interest on the account in 2021, but did not withdraw the money. What year does Sansa include the interest income on her tax return? a. Interest income is never taxable. b. 2020, the year she deposited the money. c. 2021, the year she earned the interest. d. She does not pay tax on the interest until she withdraws the money.Isabella files her income tax return 35 days after the due date of the return without obtaining an extension from the IRS. Along with the return, she remits a check for $40,000, which is the balance of the tax she owes. Note: Assume 30 days in a month. Disregarding the interest element, enter Isabella's penalty amount for each, failure to file and failure to pay.During 2020, Jackie sent her brother Junnie $2,500 via a telegraphic transfer through El Banco Prieto. The bank’s remittance clerk made a mistake and credited Junnie with $250,000 which he promptly withdrew. The bank demanded the return of the mistakenly credited excess, but Junnie refused to do so. The BIR entered the picture and investigated Junnie. Would the BIR be correct if it determines that he earned a taxable income under the facts? No, it was not her fault that the funds in excess of $2,500 were credited to him. Yes, income is a taxable income regardless of the source No, he had no income because he had no right to the mistakenly credited funds. No, the funds in excess of $2,500 were in effect donated to her.
- Alex, age 24, had an HSA account set up with her employer, Target, that had $5,000 in the account at the end of the year. She then quit her job in July and withdrew the funds. She had no qualifying medical expenses during 2022. Instead, she used the funds from the HSA to buy a used car she had wanted for a while. What is the tax consequence of this action? Group of answer choices Nothing. Taxpayers are allowed to withdraw from their HSA accounts at any time. Her withdraw is prohibited and will result in a forfeiture of the funds. Alex must pay income tax and a 6% penalty on the withdrawal. Alex must pay income tax and a 20% penalty on the withdrawal.James, a 54-year-old professor, is subject to a 28% marginal tax rate. He has a family emergency and must withdraw $5100 from his traditional IRA to fund it. How much money will he owe the government for this withdrawalYukari steals $100,000 from her employer through a series of clever transactions during calendar year 2019. Hoping that she will not be discovered, she does not report this amount on her 2019 income tax return when she files it, although she does report her annual salary of $250,000. Should Yukari have reported the $100,000 in income, she would have owed an additional $33,000 in taxes. Two years later, the scheme is uncovered by the shrewd analysis of a new employee. What is the penalty for the omission of the $100,000 of income? $24,750 $30,000 $75,000 $16,500 I DON'T KNOW YET
- Joan filed her individual income tax return 3 months after it was due. She did not request an extension of time for filing. Along with her return, Joan remitted a check for $125, which was the balance of the taxes she owed with her return. Disregarding interest, calculate the total penalties that Joan will be required to pay, assuming the failure to file was not fraudulent.Tax penalties. Joey, single, owned and operated a marina and night club. He did not file his 2019 return until January 2021. Even when he filed his return, the amount of tax on the return ($22,500) was incorrect. John carelessly forgot to include $32,350 in income from marina fees paid in cash. His tax should have been $29,600. Determine the amount of tax penalties Joey owes.Ralph has a $130,000 IRA with Red Investments. For personal reasons, he decides to move his funds to Blue Investments. He requests that his funds be distributed to him on August 20, 2018. What amount will Ralph receive from Red Investment? What is the last day Ralph can deposit the funds from Red Investments and avoid taxation in the current year? If the funds were distributed from a qualified retirement plan (not an IRA), how much would Ralph receive? Assuming the funds were distributed from a qualified retirement plan, not an IRA, how much will Ralph have to contribute to Blue Investments to avoid taxable income and any penalties?