club_cafe: backup withholding

iras1 on

Here's a tentative workaround, but you may have to change things.

Assuming your club did NOT make any charitable contributions during 2005 and the backup withholding took place in 2005:

Enter the backup withholding as a charitable contribution to a 50% organization. This will segregate the withholdings from your other expenses.

When you run your 2005 taxes, you will have to manually change some of the entries. On Schedule K, you will delete the entry on line 13a (charitable contributions), and move it to line 15f (other credits). Write "backup withholding" to the left of the amount.

On each Schedule K-1, you will delete any entries on line 13 coded "A" (50% contributions before 8/28/05) or "G" (100% contributions after 8/27/05), add them together and move them to line 15, with code "Q" (backup withholding).

If your club DID make charitable contributions in 2005, enter the backup withholdings as non-deductible expenses. Delete entries on Schedule K, line 18c, and Schedule K-1, line 18, code "C", and move them to line 15f and 15, code "Q" as described above.

If you club had BOTH charitable contributions and non-deductible expenses, you will have to figure out a different method to correctly allocate the withholdings to each member.

Ira Smilovitz

In a message dated 1/8/2006 3:49:26 P.M. Eastern Standard Time, garyordway@bivio.com writes:

How do I account for "backup withholding" from our broker.
Our broker name does not match the IRS name (we use the
acronym for broker) so they are now withholding. I am in
the process of getting the name changed at the broker but in
the meantime, I am getting backup withholding.

Thanks, for your help.

Gary

Gary Ordway on

Thanks Ira,

Gary

----- Original Message -----

From: IraS1@aol.com

To: club_cafe@bivio.com

Sent: Sunday, January 08, 2006 1:04 PM

Subject: Re: club_cafe: backup withholding

Here's a tentative workaround, but you may have to change things.

Assuming your club did NOT make any charitable contributions during 2005 and the backup withholding took place in 2005:

Enter the backup withholding as a charitable contribution to a 50% organization. This will segregate the withholdings from your other expenses.

When you run your 2005 taxes, you will have to manually change some of the entries. On Schedule K, you will delete the entry on line 13a (charitable contributions), and move it to line 15f (other credits). Write "backup withholding" to the left of the amount.

On each Schedule K-1, you will delete any entries on line 13 coded "A" (50% contributions before 8/28/05) or "G" (100% contributions after 8/27/05), add them together and move them to line 15, with code "Q" (backup withholding).

If your club DID make charitable contributions in 2005, enter the backup withholdings as non-deductible expenses. Delete entries on Schedule K, line 18c, and Schedule K-1, line 18, code "C", and move them to line 15f and 15, code "Q" as described above.

If you club had BOTH charitable contributions and non-deductible expenses, you will have to figure out a different method to correctly allocate the withholdings to each member.

Ira Smilovitz

In a message dated 1/8/2006 3:49:26 P.M. Eastern Standard Time, garyordway@bivio.com writes:

How do I account for "backup withholding" from our broker.
Our broker name does not match the IRS name (we use the
acronym for broker) so they are now withholding. I am in
the process of getting the name changed at the broker but in
the meantime, I am getting backup withholding.

Thanks, for your help.

Gary

Mail