"David Woods" <davidwoods[at]verizon.net> wrote:
- quote -

Why not $4,500?

Ira Smilovitz

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

David Woods wrote:
- quote -

No, $4,500, David.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Barry Margolin" <barmar[at]alum.mit.edu> wrote:
- quote -

You meant $3,500 right?

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Hugh wrote:

- quote -

Not quite that easy. If you withdraw the contribution before
OCTOBER 15, you have cancelled the contribution, and blown
the Saver's Credit out of the water! Read the withdrawal
rules.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

At 68 a woman's life expectancy is 85. Half die by then and
half live longer. Therefore horizon is 10 to 30 years. I
think those of us in our 70s are more optimistic when it
comes to life expectancy.

One other thing to consider that hasn't been mentioned is
that IF you are still in a no tax situation (income tax -
not self employment tax) make sure you contribute to a Roth
IRA as much as possible up to where you will still pay no
income tax.

The other BIG thing you may be eligible for is the SAVERS
CREDIT (non-refundable) of up to $1,000. It has been
estimated that only 40% of eligible taxpayers took advantage
of this credit last year, in part because it is a little
complicated. I've had clients who hit the sweet spot and
contribute $2,000 into a roth on April 15 thereby reducing
their income tax by $1,000 and pulling their contribution
$2,000 out of the bank on April 18th with no penalties.
WOW! Easy $1,000, one time only.

It may be worthwhile to get some professional advice this
year since you may have some interesting alternatives and
since your spouse has self employment income this year.

As you can see from all the posts - It ain't all that
simple!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Thanks Frank -- I analyzed the situation according to your
suggestions and I think it would make sense for us to
contribute to the IRA.

--
Ray

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Barry Margolin wrote:
- quote -

Barry, would you believe as much as 4,500$? Assuming of
course she earns that much.

However if they file jointly, and husband has income, she
may qualify for a spousal IRA instead, given low earnings of
her own.

ChEAr$,
Harlan Lunsford, EA n LA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Barry Margolin" <barmar[at]alum.mit.edu> wrote:
- quote -

Barry, I believe your information is a little outdated since
his Wife is 68 years of age.

Wayne Brasch

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Ray wrote:

- quote -

She can put in $4000 plus $500 since over 50, or her total
income, whichever is less. If your joint income is low and
you don't need to take this off your taxable income,
comsider a Roth IRA, which will not be taxed at withdrawal.

JOE

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Ray at rayj.balt[at]verizonDELETHIS.net wrot:

- quote -

Will this income make your Social Security more taxable than
it currently is? You may find that your marginal tax
bracket is much higher than you think.

- quote -

You can each put up to $4500 in either a Roth or a
Traditional IRA if you have that much SE or wage income.

Just because you can do it does not mean it makes financial
sense. Are you currently making IRA withdrawals from other
retirement funds? If so, why not make smaller withdrawals
and spend her income? Are you in a very high tax bracket
and expect to be in a lower one in 2-3 years, so you want to
defer income? If so, you might make a traditional IRA
contribution but you will have to begin to withdraw it in
just a few years.

Is your family MAGI under $100,000 making her eligible for a
Roth IRA?

You make contributions to a Traditional IRA to defer current
taxes far into the future. You make contributions to a Roth
IRA to defer taxes on growth, the longer the horizon, the
better. At 68, under average circumstances, that horizon is
10 or 15 years at the most. Does this really make financial
sense?

All freely provided advice guarantee correct or double your
money back

Frank S. Duke, Jr. CPA
Cincinnati, OH USA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

Ray wrote:

- quote -

She can contribute up to $4500 or the amount of her
earnings, whichever is LESS. If you still have earned income
(are working), the amount she can contribute may be more,
but the $4500 limit still applies.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Ray" <rayj.balt[at]verizonDELETHIS.net> wrote:

- quote -

If she earns at least $2,000 then she can contribute up to
that much. If she earns less than $2,000 she can contribute
up to her earned income.

--
Barry Margolin, barmar[at]alum.mit.edu
Arlington, MA

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

After many years of having no income, my wife, 68, started a
small consulting business which will earn her a few thousand
dollars this year.

Can she put some (and how much) of this income into her
regular IRA?

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >