QUESTION: May I contribute to Roth IRA when my only income is from SSA and stocks?

KEVIN ANSWERS: No.

QUESTION: I have a traditional IRA funded with nondeductible contributions. I've been avoiding converting to a Roth IRA because of the tax on earnings. With much of the earnings eliminated by current market conditions, would this be an opportune time for the conversion?--RLA

KEVIN ANSWERS: Lots of advisers see a silver lining in the losses...you can convert at a lower cost.

QUESTION: What is the IRS logic in requiring a mandatory 20% withholding rate on 401-K withdrawals? There should be more flexibility. I have just begun withdrawals from my 401-K and have calculated that I will be over withheld by $3648 at the federal level and $2385 in Maryland for the tax year 2009. Why is this required for 401-Ks and not IRAs? Earnings withholdings can be adjusted by filing a new W-4 with an employer. Why not 401-Ks? KB

KEVIN ANSWERS: Don't blame the IRS. Congress imposed the 20% withholding rule simply as a way to raise revenue.

QUESTION: I was told by some seniors that they do not have to file federal taxes anymore because they are on social security & have a small savings account is this true? I thought you file till you die. --CM

KEVIN ANSWERS: No, you don't have to file until you die.

QUESTION: Are electric powered golf carts which are street legal eligible for any tax credits in 2008?  It was placed in service Oct 1, 2008.  Thank you.

PETER BLANK ANSWERS: No.

QUESTION: I withdrew $10k in 2007 to purchase my first home. I had $1k taken out of the distribution before I received it for federal taxes. I received a letter from IRS stating that I owe the additional $1k for the early withdrawal penalty. Do I owe IRS this additional $1k since the money was for my first home purchase? --JK

KEVIN ANSWERS: You are correct that the 10% penalty for early withdrawal from an IRA does not apply to up to $10,000 used to buy your first home.

QUESTION: Do I need to have documents to receive cash inheritance from overseas to not get taxed?

PETER BLANK ANSWERS: Cash you receive as the heir of an estate is not taxable, even from the estate of a non-U.S. citizen.

QUESTION: I work and also own a small business I started the business in 2008.I loss money in the business due to start up cost.Do i have to report my losses or business expenses in 2008 or can they be carry forward in 2009.

PETER BLANK ANSWERS: If your business is a sole proprietorship or an S corporation, the business loss flows through to your personal tax return and can be used to offset your other income. 

QUESTION: I am a self-employed building contractor.  I am doing my own taxes on Turbo Tax.  How do I enter my health insurance premiums and other medical expenses?  Does it matter if this is all done on a Schedule A? -- NK

KEVIN ANSWERS: As a self-employed taxpayer, you may qualify to deduct your health insurance premiums as an adjustment to income on the face of the 1040 instead of as an itemized deduction on Schedule A.

QUESTION: I receive social security benefits now and know how to determine the taxable amount at the end of the year, but how can I calculate it on a quarterly basis as I make estimated payments? Can I annualize as I do for the rest of my AGI? --LH

KEVIN ANSWERS: Sure, that would be fine.