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Means test: two questions

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    Means test: two questions

    I have had no earned income for the past two years+ (had major surgery 18 months ago). At first I used up my savings, then advances on CC and finally, by withdrawing early from my IRA's. The early IRA distributions are income in the eyes of the IRS. How are they treated on the means test?

    My daughter is just completing her freshman year in college. I paid her tuition for the fall of 2008 and slightly more than half for the 2009 spring semester (the funds came from 529 accounts I established years ago for her education and are exempt). While home for the summer she will divide her time between my home and her mother's. Can I claim two people (my self and my daughter) as the size of my household?

    Thanks.

    #2
    IRA distributions are income to the BK. I withdrew some 401K money, and if I had filed soon after, then I would have been over median income. Also, on the means test, the withdrawal will count against you double, because they look at income for the last six months and double it. So, if you regular annual income is $50k, and you withdrew $10k last month, your six month income will be $25k from regular pay and $10k from IRA for a total of $35k. Then, this is doubled, so your new annual pay is considered to be $70k for the means test.

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