We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

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

Client Testimonials

I had a 1099-C for about $135,000. My husband didn't have any withholding on Social Security. His employer couldn't withhold due to incompetence. I felt utter dread wash over me. Memories of owing the IRS before were constantly on my mind. I called a local CPA. Besides being clueless, he wanted to charge me for every question I had about insolvency. I looked on line and found little hope of the countless stories of permanently disabled people like myself getting their student loans forgiven only to be asked to pay taxes on it as if it were income.
Somewhere, somehow, I find an article by Gary Bode. I bookmarked it for when it's time to do the actual taxes. With his excellent help in how to do all of this out of a virtual office I get my part of the work done. My questions got answered, for free. I give a retainer, do what I said I did and wait. I hear from Gary. I go into shock! How can this be? Not only do I not owe on the 135,000....Gary itemizes and after paying what was almost nothing in taxes we get $950.00 back! No more hubby doing the taxes online! I will use Gary Bode as long as he will agree to work with me!
It was so easy, no worries, but professional and top notch. I know I have thanked you Gary but I am so grateful. Thank you ever so much again!

Carla Bray

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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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