AboutHelen P. O`Planick, EA Expertise I am a tax professional, with experience in individual taxation. I would prefer not to answer questions about non-resident aliens or corporate taxation. Please do not ask me state related questions, unless the state is Pennsylvania. There are 42 taxing states and 42 TOTALLY different sets of state tax law.
Experience I have been preparing tax returns almost all my life. I have been in professional practice for 25 years and I am enrolled to practice before the Internal Revenue Service.
Organizations National Association of Enrolled Agents
Publications I am a prior Money Magazine Tax Test taker and have been quoted extensively in all media including monthly periodicals and books by tax authorities.
Question Hello Ms. O'Planick, I had my taxes professionally prepared last year. I do not understand why both my wife's and my pension were reduced from 18,000 to 4,000 on lines 12A to 12B on Form 1040A. Is this a normal reduction allowance? Is it because we both paid into our pensions while working? Or is it because I retired under a disability retirement before the normal regular age last year? If so, and I am now at the normal allowable age this year, will that allowance no longer be credited this year or in future years?
Also, if I work part time this year and get paid on a form 1099, when I send in a quarterly payment on a 1040-ES to the IRS, does the IRS notify and pay my social security taxes so that I will earn my needed quarters or credits?
Thanks so much for your help! Bill.
Answer First question - it appears you have non-taxable income in your pension plans. If so, it will continue to carry forward, but I am guessing without seeing the paperwork.
I can't tell you if you need to pay estimated payments or not, I don't know your personal situation, but you will file Sch SE with your return to pay the SE taxes.
