Kompu Kid <deguza[at]hotmail.com> wrote:
- quote -

Well, not really. You are being taxed more only because you
want to put this additional savings into a tax deferred
plan. There is nothing that prevents you from saving as
much money as you want outside of a tax deferred plan. Or
you could buy one of a number of tax deferred investment
options, such as EE or I Bonds.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

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Kompu Kid <deguza[at]hotmail.com> writes:

- quote -

You're still misreading things. Being in a
401(k) only affects whether or not a traditional
IRA contribution is *deductible*. It *does not*
affects your ability to make a traditional IRA
contribution, so being in a 401(k) *cannot* cause
your IRA contribution to be "excessive".

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

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"Kompu Kid" <deguza[at]hotmail.com> wrote:

- quote -

It sounds to me like you're in over your head. One is
allowed to make IRA contributions as long as there's taxable
compensation left in Box 1 of the W-2. The presence of a
401(k) does affect the deductibility of traditional IRA
contributions, but not the ability to make them.

Keep looking or haul this mess off to a professional. It
will cost you less than a $300 penalty you simply do not
need to pay. Even if you've done something that would
result in the penalty, you still have time to fix it and
avoid the penalty.

--
Phil Marti
Clarksburg, MD

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Dave Filpus <dfil...[at]gmail.com> wrote:
- quote -

I followed the Turbotax trail and looked up the help
screens. It turns out that it is for excessive
contributions. Since I have a 401K plan, anything I
contributed to the IRA was considered excessive.

What a shame. We complain about Americans not saving enough,
yet we get taxed when we want to save more...

Deguza

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Kompu Kid" <deguza[at]hotmail.com> wrote:

- quote -

Safe bet.

- quote -

Now it sounds like you told it you made a $5,000 excess IRA
contribution resulting in a 6% ($300) penalty.

Did you run TT's "alerts" or whatever they call their
diagnostic routine after the return is done but before you
file? That should identify a problem with IRA contributions
and give you a chance to fix it.

If that doesn't work, try one of the following:

1. Go to lines 32 and 60 of the 1040 and right-click. That
should take you to the worksheets feeding those lines.

2. Go into the interview mode and go to the section where it
asks about IRA contributions and fix your error(s).

--
Phil Marti
Clarksburg, MD

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- quote -

I wonder if I put the figures in the wrong line.

I did not take any money out from an IRA, but rather I was
considering depositing $5K. When I saw the tax figure I
decided not to. Since I have a 401K plan, it really does not
reduce my taxes for the current year. It just saves me from
paying tazes on the interest (I think).

Deguza.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

"Bill Brown" <brownwp[at]longwood.edu> wrote:

- quote -

An all-too-common premature distribution with no mitigating
factors will not generate a 5329, just the penalty. See the
instrucitons for line 60 of the 1040.

--
Phil Marti
Clarksburg, MD

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Kompu Kid <deg...[at]hotmail.com> wrote:

- quote -

It is all about you being under 59 1/2 and withdrawing
retirement money, IRA or company retirement, etc. There is
a 10% penalty for withdrawing it before you are of
retirement age. Your withdrawal was $3000.00. Am I
correct?

Missy Doyle

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Kompu Kid <deguza[at]hotmail.com> wrote:

- quote -

Line 60 is for reporting tax penalties due on distributions
from various sorts of IRAs or for excessive contributions to
IRAs. One example is the 10% tax penalty for taking money
out of an IRA before you reach 59 1/2. Turbotax should have
generated a Form 5329 detailing the situation.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Kompu Kid <deg...[at]hotmail.com> wrote:

- quote -

Most likely it's the 10% excise (penalty) tax on early
withdrawals from an IRA.

Did Turbotax also generate a Form 5329? If so, inspecting
that form will provide more information.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

Kompu Kid <deg...[at]hotmail.com> wrote:

- quote -

I'm guessing that you took $3,000 out of your traditional
IRA last year and you are under the age of 59-1/2. There is
a 10% penalty for money taken out of retirement accounts
before age 59-1/2 unless you meet one of the exceptions on
Form 5329. IRAs are retirement accounts, and if you use the
money for something other than retirement, the government
penalizes you unless you have an acceptable reason.

If this was a Roth IRA, then you might have answered one of
the TurboTax questions incorrectly, as you can take out
contributions from a Roth any time without having to pay
taxes or penalties.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

"Kompu Kid" <deguza[at]hotmail.com> wrote:

- quote -

did you take out money ($3,000?) from an IRA or other
retirement plan?

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

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"Kompu Kid" <deguza[at]hotmail.com> wrote:

- quote -

My crystal ball is in the shop for repairs, so I'll have to
guess. Do you have a $3,000 taxable distribution on line 15
or 16 of the 1040 and were you under 59 1/2 when you took
the money? If the answer to both is yes, the $300 on line
60 is the 10% premature distribution tax.

--
Phil Marti
Clarksburg, MD

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

- quote -

Did you take $3,000 out of your IRA and you are less than
59-1/2 years old?

--
Don EA in Upstate NY

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >

I got an extension this year, and one of the reasons is that
Turbotax came up with a $300 "additional tax IRAs" (1040,
line 60).

What is this all about?

Deguza

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >