Discussion:IRA Contribution
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Discussion Forum Index --> Basic Tax Questions --> IRA Contribution
Discussion Forum Index --> Tax Questions --> IRA Contribution
| 9 January 2008 | |
| As a new Tax Preparer I have a question regarding IRA contributions. Let's say I have contributed so far $ 3,000 into my IRA account as of today and I intend to add an additionnal $ 1,000 to make $ 4,000, the maximum yearly contrution, by the April 15. If I decide to file my return today am I allowed to deduct $ 4,000 (the amount I expect to contribute by April15) or should I put the $ 3,000 I have actually put into my IRA account?
Thank you. | |
| 9 January 2008 | |
| If you (and the bank / mutual fund company) classify the contribution as a 2007 contribution then you would use $4,000. If the contribution is classified as 2008 then you would use $3,000.
Good luck with the tax business. How do you plan on recruiting clients? Dusty | |
| 9 January 2008 | |
| Dusty, I think he is asking whether he can take the deduction for the contribution he has not yet made, but is intending on making by 4/15. | |
| 9 January 2008 | |
| Kevin, I agree as to the question. My answer is yes, he can file claiming the $ 4000 contribution and use his (assumption here) refund to pay in the last $ 1000 before April 15, 2008. | |
| 9 January 2008 | |
| I think it may even be possible to direct a portion of the refund directly into a money market account inside the IRA using Form 8888. Does anyone know if this is correct? | |
| 9 January 2008 | |
| You are correct JD as long as it gets in timely and is forwarded to a qualifying account (pre-established) | |
| 9 January 2008 | |
| You are correct JD as long as it gets in timely and is forwarded to a qualifying account (pre-established) | |
| 9 January 2008 | |
| Yes, I believe it is correct. But not sure I would necessarily trust everything to go smoothly. I'm old fashioned enough to want that paper trail... | |
Death&Taxes (talk|edits) said: | 9 January 2008 |
| And depending how you fill in Form 8888, if there is an error reducing the refund, you might find the contribution was never made for IRS has a priority list on making the direct deposits. List the IRA account first. | |
| 9 January 2008 | |
| Thank you guys, I really appreciate your feedback. Dusty, after working for H & R Block in 2005 I now mainly work independently from home, catering for a limited number of clients, family, friends and people referred by them. I don't earn a lot from that but I love the business and make sure I formally take classes every year before the beginning of the tax season.
Igoudiaby | |
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