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#3
12-28-2004, 08:19 PM
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 Re: Maximum retirement invested JD13 wrote: - quote - > I expect to retire after working for only a few months in
In addition to the other answers, here is one thought for> 2005, earning at the most $15,000. I've arranged for my > employer to withhold 50% toward my 401k, and would like to > contribute all remaining earnings for the year toward my own > and spousal IRA ($4000 max per person), leaving me with $0 > take home. Is there a problem with doing deducting all my > earned income from the perspective of the IRS? you: Can you prove what you lived on during the year (e.g. a decline in assets like "cash in the bank", etc., or an increase of liabilities)? Some of the "economic reality" cases I had when I worked for the IRS were those that had low or "negative" taxable income. Many were explainable, but those, where the difference (after backing out depreciation, personal exemptions, etc., ... ; those things which don't represent cash flow) exceeded $100k generally got fraud considerations (or actually went through the civil or criminal fraud procedures). This is why saving even the supermarket receipts (as non-deductible personal living expenses) can become important.... << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#2
12-22-2004, 02:50 PM
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| Re: Maximum retirement invested JD13 wrote: - quote - > I expect to retire after working for only a few months in
Provided y'all otherwise qualify for the two separate IRA's,> 2005, earning at the most $15,000. I've arranged for my > employer to withhold 50% toward my 401k, and would like to > contribute all remaining earnings for the year toward my own > and spousal IRA ($4000 max per person), leaving me with $0 > take home. Is there a problem with doing deducting all my > earned income from the perspective of the IRS? no problem. Let's see now, half of 15,000$ = 7,500. Okay, plus 2 times 4000 = 8000. Total is 15,500. Oh, don't forget the FICA employer will withhold on your wages, 7.65% of the 15,000. Looks like you'll have to come up with the difference, assuming no other deductions for either federal or state withholding. Merry Christmas! Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#1
12-21-2004, 12:26 AM
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| Re: Maximum retirement invested "JD13" <jan_douw[at]yahoo.com> writes: - quote - > Is there a problem with doing deducting all my
More important is there any problem in the law with doing> earned income from the perspective of the IRS? so. The answer is no. If the IRS gets curious, you answer their questions and you're done. Phil Marti Clarksburg, MD << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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12-21-2004, 12:07 AM
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| Re: Maximum retirement invested JD13 wrote: - quote - > I expect to retire after working for only a few months in
No. Just be sure to reduce your "earned income" by pre-tax> 2005, earning at the most $15,000. I've arranged for my > employer to withhold 50% toward my 401k, and would like to > contribute all remaining earnings for the year toward my own > and spousal IRA ($4000 max per person), leaving me with $0 > take home. Is there a problem with doing deducting all my > earned income from the perspective of the IRS? deductions before determining your IRA contribution. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#-1
12-20-2004, 10:45 AM
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| Maximum retirement invested I expect to retire after working for only a few months in 2005, earning at the most $15,000. I've arranged for my employer to withhold 50% toward my 401k, and would like to contribute all remaining earnings for the year toward my own and spousal IRA ($4000 max per person), leaving me with $0 take home. Is there a problem with doing deducting all my earned income from the perspective of the IRS? Thank you, JD13 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| invested, maximum, retirement |
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