OT Tax question

Brock Landers · Jan 30, 2007

Turns out my wife and i will owe about 2400 bux to the IRS, we made too much but didn't have enough taken out and didn't do our 401K's this past year.

Anyway, is there a way to offset this still this year with IRA contributions? I mean better to give it to ourselves than the government...

BlackBart · Jan 30, 2007

Almost certain there is still time to fund an IRA and have it count in '06. I believe you have until April 15th.

I believe that funding an IRA is a tax DEDUCTION and not a tax CREDIT. A tax credit will offset your tax owed dollar for dollar, but a deduction will only decrease your taxable income. Depending on your effective tax rate, you may not be able to completely offset what you owe.

Brock Landers · Jan 30, 2007

Black Bart said:
Almost certain there is still time to fund an IRA and have it count in '06. I believe you have until April 15th.

I believe that funding an IRA is a tax DEDUCTION and not a tax CREDIT. A tax credit will offset your tax owed dollar for dollar, but a deduction will only decrease your taxable income. Depending on your effective tax rate, you may not be able to completely offset what you owe.

This is exactly what i was thinking.

Who would be the best place to contact regarding this? Like H R Block?

bilbal · Jan 30, 2007

just click here:

http://www.irs.gov/pub/irs-pdf/i1040.pdf

and do the worksheet on page 32. It will tell you what amount, if any, you can deduct. If you're going to use the IRA deduction, you have to have the full amount you write down on line 32 in the bank by the deadline.

OT Tax question

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Brock Landers

Cui servire est regnare

BlackBart

Life is tough. It's tougher if you're stupid.

Brock Landers

Cui servire est regnare

bilbal

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