In article <20040220011817.09952.00000038[at]mb-m17.aol.com> , Coyote200
<coyote200[at]aol.com> wrote:

- quote -

That depends on a number of factors, such as any costs to liquidate
your investment, or fees to cash out any CD's you hold, and you
adjusted gross income. This IRA cash-out will be counted as income,
so it will increase your income, and you will pay taxes on it. It
could very well kick you up into the next tax bracket, which could
get very expensive very quickly. It also depends on the type of IRA
it is, traditional or Roth. In general, figure that you will get to
keep about 50% of the IRA, but that is a rough guess without having
your numbers. That will make it the most expensive possible source
of cash that you have other than a mafia loan shark. In addition,
IRA money is your future retirement, so consider what you are going
to be eating when you are 74 years old if you blow your IRA today.
Don't do it. Just say no.

The only real exception that I would consider is if you are terminally
ill. In that case, the IRS has a solution for you. If this is your
case, please post back and tell us about it.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

this may be unrelatedbbut,here goes:if you're not yet 59 years old & want to
liquidate an ira that's worth around $8,000 how much would you actually get
after penalties,etc?

leslie

On Sun, 15 Feb 2004 08:19:44 CST, Rich Carreiro
<rlcarr[at]animato.arlington.ma.us> wrote:

- quote -

As Rich points out, anything that lowers AGI (see front page of 1040)
makes it more likely that the taxpayer will come in under the phaseout
points. Of course, at very high income levels, nothing will help.

For a quick look at the phase out points, go here:

http://www.finance.cch.com/sohoApplets/RegularIRA.html

The top of that site is a nifty calculator. Scroll down for the phase
out ranges.


-HW "Skip" Weldon
Columbia, SC

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> writes:

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Yes.

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If you participate in a qualified employer retirement plan (of which a
401(k) is one example), the deductibility of your traditional IRA
contributions (though not your ability to make contributions) is
phased out and then eliminated depending on your AGI. I don't recall
the limits, but it's all in IRS Publication 590 (and should be in your
Form 1040 instructions as well).

- quote -

That's correct, but the overcontribution penalty is independent
of 401(k) contributions.

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Adjusted Gross Income. The number on the last line of
the front side of Form 1040. Though for the Roth
contribution test, a couple of modifications are made
to that number. See the information sources below.

- quote -

I don't recall. See the Form 1040 instructions or
IRS Publication 590.

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

- quote -


Roth IRA does not have tax deduction advantages, but you can withdraw it tax
free after age of 59 1/2. The contribution limit is based on how much you
earn.

Adjusted gross income
Your tax filing status
(Tax year 2001 on) Full contribution Partial contribution Not eligible
Single/Head of Household Up to $95,000 $95,000 - $110,000 Above
$110,000
Married Filing Jointly Up to $150,000 $150,000 - $160,000 Above
$160,000
Married Filing Separately N/A $0 - $10,000 Above $10,000


"_JP" <YamYam[at]nospamsplease.megapathdsl.net> wrote in message
news:102u1rh1kst8nc6[at]corp.supernews.com...
- quote -

"Rich Carreiro" <rlcarr[at]animato.arlington.ma.us> wrote in message
news:u8yj5lzx9.fsf[at]animato.arlington.ma.us...
- quote -

It "can" affect.... So, does that mean sometimes it does, and sometimes it
doesn't? When does it affect the deductibility? And in such instance, how
is the deductibility affected?

The way I understand IRA is that if someone puts more than $3,000/$3,500
into his IRA account for that year, he not only doesn't get the deduction
for the amount above the allowance, but also will have to pay some sort of
additional penalty. Maybe I am wrong on this, but if I was right, when you
said it doesn't affect the allowable contribution at all, did you mean he
wouldn't have to worry about this "extra" penalty, but only the
non-deductibility, up to $3,000/$3,500 per year?

- quote -

1. What is AGI?
2. What is the pahseout range?

You have to forgive my ignorance because I am ignorant. Also, I really
appreciate your response. Thank you!


- quote -

"_JP" <YamYam[at]nospamsplease.megapathdsl.net> writes:

- quote -

For a traditional IRA:
* It doesn't affect the allowable contribution at all.
* However, it can greatly affect the deductibility of
said contribution.

For a Roth IRA:
* By lowering AGI, it may allow some or more of a Roth
contribution to be made (if the person was in the
Roth contribution phaseout range).

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

If someone's already contributing money to his 401K account, how does that
limit his contribution allowance to IRA?

My guess was the contribution allowance to IRA would be $3,000 (or $3,500 if
he's old enough) minus whatever the total contribution to his 401K for that
year (both by himself and his employer), but I'm not quite sure any more.

???