Stick with me:

I am not employed, have a dormant LLC. Have not had income for many years. My fiance supports us both. Every week (for years) he puts money into my checking account (only my name on account) and we pay household bills and shop online using that money.

Every year I file 0 gross income on my taxes. I take no deductions or receive any money back. If the IRS looks at my bank account (again only my name) it looks like I have thousands of dollars rolling in.

I put money into a ROTH IRA a few years back and just found out you need income or it's not allowed. I caught the error, not the IRS and sent an amended return and paid the penalty. Had not had any response from them yet.

My fear is the IRS will now start looking over my bank records and assuming I'm lying or hiding income when it's all my boyfriends money. I'm sure it more than the 13,000 allowable as a gift.

So sick with worry and stress and fear I can hardly do anything. Am I crazy to worry? What do I do?

Thank you for your help.

#1:Correct; you can only contribute to a Roth IRA in a year when you, or your spouse, receive earned income, what the IRS considers compensation.



#2:Since you made a contribution to a Roth IRA that's not permitted, you've made an excess contribution. If you find that your contribution to a Roth IRA was improper, you can avoid the 6% penalty tax by taking the money out. Relief from the penalty is available only if You receive a distribution from the IRA on or before the due date (including extensions) for filing your return for the year of the contribution. The distribution includes the amount of the excess contribution and the amount of net income attributable to the excess. When you choose this method of correction, you're required to report and pay tax on the net income attributable to the excess in the year of the contribution, even if you take it out during the following year, before the return due date. The earnings will be taxed like any other taxable distribution of earnings from a Roth IRA, and will be subject to the early distribution penalty if you're under 59½ unless an exception applies.You need to act by the end of the year, not by the due date of the return for that year. If your excess contribution was made in 2011, you must act by December 31, 2012 to avoid a penalty for 2012. When using this correction method you don't have to withdraw earnings. You simply withdraw the amount of the excess contribution.

#3:It is a gift and yu are a do nee; as long a the amount of the gift exceeds $14K for 2103, $13K for 2012, your BF MUST file form 709; as long as the value exceeds the annual exclusion amount of $13K for 2012, $14K for 2013, the gift giver must file IRS Form 709. Still, this does not guarantee the donor will have to pay gift tax, because as of 2013 the lifetime exclusion limit for gifts is $5.25Million.you do not need to be worried about anything on the gift as a done; the donor, your BF, is generally responsible for paying the gift tax as long as the amount of his cumulative gift amount exceeds $5.25milliuon . Under special arrangements the donee may agree to pay the tax instead;this is a rare case. However, if you receive a gift and you earn income from, that gift, you will need to report and pay tax on that income, if applicable.

#4:As mentioned above.

Thank you very, very much for your reply. Honestly, it is appreciated more than you can know. I can't sleep right or think of anything else.

It's around $400 every week in cash my boyfriend puts in my checking account - and has done so for years. We pay utilities, cable, etc. and make online purchases most in his name. We have lived together since 2005 and have our car insurance together. I've never made interest off the money.

How does the IRS view that $400 a week? Are you sure they will not consider it income? Am I profiting from these deposits if we are just paying bills and buying things? Since the deposits are cash and not checks or transfers how do I prove the money comes from him - deposit slips?

I only mention the $13,000 because I read it somewhere - is that how the IRS views the money - as a gift? If so, how much tax would my boyfriend pay on the allowed amounts?

THANK YOU again for you help.

#1:As you have been living together, even if you are claimed as his dependent on his return, it is still a gift and you do not need to report it on your return as it is a gift. As said, he needs to file form 709(UNLESS he claims you as his dependent on his return) as long as the amount of the gifts exceeds $13K for 2012.


#2:Then you do not need to report the gift on your return as a done as said previously.



#3:As a gift for you. He can never deduct the gift money that he gives to you9$400 /week *52 weeks per year) on his return it is after tax dollars.



#4:“ As long as it is a gift , it is not your taxable income; you as a done, do not need to report the gifts on your return .


#5:No; there is no any profit generated in paying bills and buying things,Ok??If you deposit the money in your bank account and earns interest income then you must repot it on your return as taxable unearned income.


#6:Yes; bank stmt or etc,.



#7;As long as it is a gift, and exceeds $13K for 2012, he needs to file form 709 but UNLESS the cumulative amount of the gifts that he made exceeds $5.25 million for 2013, he doesn’t need to pay any tax on the gifts due to the presence of unified transfer tax credits.

Wnhough you are WONDERFUL.

I wish I could repay you. THANK YOU, THANK YOU, THANK YOU.

"As said, he needs to file form 709(UNLESS he claims you as his dependent on his return) as long as the amount of the gifts exceeds $13K for 2012."

He did claim me in 2011 and 2012 - therefore he does or does not have to file 709?

"#3:As a gift for you. He can never deduct the gift money that he gives to you9$400 /week *52 weeks per year) on his return it is after tax dollars."

Taxes are taken out of his check every week. The only deduction he takes is me as a dependent. Almost 100% of his income goes into my checking account. Does this effect his standard personal deduction or anything else?

#7;As long as it is a gift, and exceeds $13K for 2012, he needs to file form 709 but UNLESS the cumulative amount of the gifts that he made exceeds $5.25 million for 2013, he doesn’t need to pay any tax on the gifts due to the presence of unified transfer tax credits.

So if he now files a 709 for years 2011 and 2012 for approximately 40,000 in total there will be no tax owed or penalty?

Thank You again. I'll make every effort for this to be my last questions. You've been very generous.

You are very welcome; good luck~

Sorry - you replied quickly while I was editing. At the risk of going to the well one to many times - I have just a few follow up questions.

"As said, he needs to file form 709(UNLESS he claims you as his dependent on his return) as long as the amount of the gifts exceeds $13K for 2012."

He did claim me in 2011 and 2012 - therefore he does or does not have to file 709?

"#3:As a gift for you. He can never deduct the gift money that he gives to you9$400 /week *52 weeks per year) on his return it is after tax dollars."

Taxes are taken out of his check every week. The only deduction he takes is me as a dependent. Almost 100% of his income goes into my checking account. Does this effect his standard personal deduction or anything else?

#7;As long as it is a gift, and exceeds $13K for 2012, he needs to file form 709 but UNLESS the cumulative amount of the gifts that he made exceeds $5.25 million for 2013, he doesn’t need to pay any tax on the gifts due to the presence of unified transfer tax credits.

So if he now files a 709 for years 2011 and 2012 for approximately 40,000 in total there will be no tax owed or penalty?

Thank You again. I'll make every effort for this to be my last questions. You've been very generous.

He did claim me in 2011 and 2012 - therefore he does or does not have to file 709?====>>>>>>>>>>>>>>> He needs to file form 709 as long as the amount of a gift exceeded $13K in 2012, i guess $12K for 2011.


So if he now files a 709 for years 2011 and 2012 for approximately 40,000 in total there will be no tax owed or penalty?==============>>>>>>>>>>>>>>then he needs to pay some penalties; A penalty applies if a taxpayer does not file Form 709 ; IRS imposes penalties for both late filing and late payment; as he i s nOT subject to gift taxes
, he probably needs to pay some penalties for late filing 709

.The late return will incur a penalty of 25% of the tax due. 25% of zero is zero so don't sweat it. I guess you can contact the IRS for more info in detail.

Thanks again. Have a great weekend!!!

You too~~~~~~~~