On Apr 10, 7:22 pm, joetaxpayer <joetaxpa...[at]nospam.com> wrote:
- quote -

Yeah that's what I was asking.

I'm not saying I condone the practice or that it is highly beneficial,
but in this case it may "fix" the OPers IMMEDIATE problem. Of course
doing so just defers the problem, along with the taxes, for a year.
Hopefully, the OPer is disciplined enough that he can increase his
withholding over the next year, save more money, and better plan for
tax time in general over the next year.

Having said that, the original post leads me to believe you must have
the money to cover the $1500 tax liability because you are considering
putting $4000 into an IRA. If that is the case, its not a cash flow
matter but a tax avoidance matter in which case you will be back here
next year trying to once again avoid the taxes.

kastnna wrote:
- quote -

You mean depositing on 4/14/07 to claim on 06 return as deduction only
to take as income in 07? Sounds more like a waste of one's effort,
unless 07 was a lower bracket year, then I'd consider it.
JOE

Anyone ever run into a situation where someone over the age of 59.5
contribs to an IRA right before tax day to lower income taxes and then
withdraws the contrib right after tax day?

Is it legal? Would it be tax avoidance, or just tax deferral?

psychprof32[at]sbcglobal.net wrote on [Fri, 6 Apr 2007 08:25:02 -0500]:
- quote -

You probably can, but there would be no tax benefit to this

Did you have investment income in 2006?
You'd be replacing 15% tax with possibly higher earned
income tax via IRA. The benefits of a deferred income
retirement accout accrue from decades of untaxed
compound interest which is no longer an option for you.

On Apr 6, 2:03 am, "psychpro...[at]sbcglobal.net"
<psychpro...[at]sbcglobal.net> wrote:
- quote -

Another thought occured to me. Can I roll over money from a dormant
403b (no longer contributing as I retired from full time work) to open
an IRA within the same investment firm?

I owe more on federal (and state taxes) than I thought. I am
wondering if it makes sense to purchase an IRA for the 2006 tax
year? I am retired but work at the same job part time. I am over
65. However...and here is the major "concern". I would need to
purchase the IRA with a home equity line of credit. If I take out a
traditional IRA for about 4000 it would "save" me about 1500 in
federal and state taxes

Any advice?