We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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Retirement CPA comments on exceptions to the IRA Early Distribution 10% Additional Tax | Forms 1099-R

Retirement CPA 10% additional tax on IRA early distributions

Gary Bode, CPA: sometimes planning saves you the 10% additional tax on early distributions from your IRA. (910) 399-2705.

Retirement CPAs see lots of folks taking early distributions from their IRA during the recession. Early distribution means you take it out before you’re 59 ½ years old. IRA distribution becomes taxable income. And early distributions incur an additional tax of 10% on the amount of distribution.  How does the IRS know? Your financial institution sends you and the IRS a Form 1099-R. They’ll use Code 1 in the distribution type box of Form 1099-R; early distribution with no known exceptions. Ouch!

I’m just discussing the additional tax of 10% for early distribution.

Exceptions to the 10% Additional Tax on Early Distributions of your IRA

The IRS recognizes there are valid reasons for taking an early distribution of an IRA. Sometimes you’re exempt for the additional tax of 10%, even if Code 1 is on Form 1099-R. So here are some of these exceptions. Remember lots of IRS wrinkles make this a minefield; this is just general advice.

  • Un-reimbursed medical expense. Total medical expenses over 7.5% of your Adjusted Gross Income may be exempt. There’s talk of increasing the threshold to 10% of AGI.
  • Medical insurance payments. Lots of rules here, but basically you have to be, or been unemployed to qualify.
  • You’re disabled.
  • Higher education expenses. The IRS defines qualifying expenses.
  • You inherit an IRA.
  • You use the distribution for a first home. Lots of wrinkles here.
  • The IRS took the IRA as payment for a tax lien.

“Most clients present an early distribution to CPAs after they’ve already taken it. Sometimes planning makes a difference in the 10% additional tax on early IRA distributions.” 
– Gary Bode, retirement CPA

You report the additional tax on Form 5329. For a Code 1 Form 1099-R, your CPA has to make a good case to abate the 10% additional tax. Sometimes your financial institution can change the code on Form 1099-R if they know it’s for an allowed exception. Like most tax work, planning is usually better than reacting after the distribution.

I’m a retirement CPA because I deal with folks who have IRAs. I just saw so much additional tax going to the IRS because of bad circumstances and bad planning. For a free phone consult please call (910) 399-2705.

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