I was ordered by family court to put $35K into a trust fund for my son in 2006. I had to take it from my tax deferred annuity. The money is for secondary education, but if not used for this, still passes to him with trustee approval for its reasonable use. I am on SSDI. Because of this one time court ordered funding, not only the 35K is being taxed, but so is my 2006 SSDI. I used Turbo Tax and owe a lot of taxes(Fed+State). Is there any way this tax due can be spread over years, such as income averaging? Does averaging even still exist in tax law?
2007-03-25 12:57:42 · 4 answers · asked by EDWARD M 1 in Business & Finance ➔ Taxes ➔ United States
Since you are disabled, you may not have to pay a 10% early distribution penalty. The distribution itself is taxable, regardless of when it is distributed.
If it were passed to your spouse it could have escaped taxation, but since it passed to your son, you will pay taxes on this distribution in the year it was distributed.
Unfortunately there is no longer an income averaging option.
2007-03-25 18:15:12 · answer #1 · answered by ninasgramma 7 · 1⤊ 0⤋
Income averaging was discontinued quite awhile back except for a few specific occupations.
2007-03-25 13:13:27 · answer #2 · answered by Judy 7 · 1⤊ 0⤋
i think of they might desire to pay taxes proportional to the proportion of the national earnings they take in. If the coolest a million% earn extra desirable than 39% of the national earnings, then 39% of taxes isn't sufficient. If the coolest a million% earns extra like 15% of the national earnings, then they might desire to pay that quantity of the national earnings tax.
2016-12-08 11:09:38 · answer #3 · answered by galle 4 · 0⤊ 0⤋
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2015-02-05 08:09:00 · answer #4 · answered by Bale 1 · 0⤊ 0⤋