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SharonAK

No Possible Ira Contribution?

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I'm over 50 & retired from teaching several years ago. I worked in 2007 for a university less than 20 hours per week (49%). I contributed the maximum I could to a 403(b) -- $20,000 in 2007.

 

One paycheck was received in 2008 due to payroll timing. Social Security & Medicare were paid & the remaining $918 went directly into the 403(b).

 

The "retirement plan" box 13 is checked on my W-2.

 

If the box was not checked I'd be eligible to contribute $6000 to a traditional IRA. Because it is not checked, I cannot do so. I had assumed there'd be a way to contribute $6000 minus the $918....but I don't see how?

 

Is this true? Did I blow it (to the tune of loosing the ability to deduct $5012) from my income taxes by not stopping the 403(b) deferrals before that final check?

 

If not HELP? What do I do....

If i BLEW it..... then that info would be good to ad to FAQ's for others in similar situations...

 

Second question: What about a SEP? I did a small amount of consulting work in 2008. Any thoughts there?

 

--Sharon

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Since none of the experts are chiming in, how about an amateur with some common sense?

 

The way I see it...

Box 13 checked just means that you put some money into a retirement plan.

 

If it was less than $6000, why not just go ahead and put your $5100 into an IRA?

As long as you know that you did not exceed the $6000 limit, and have records to prove it, why should the IRS be concerned?

 

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Thank you for the reply...that's what makes SENSE to me and would seem to meet the intent.

 

I'd think there would be a way to do that. Turbo-tax doesn't seem to offer a way, tho, and everything I read leads me to believe that I cannot.

 

If it's true I do think that, at least, it's a good one for the FAQ's at 403(b).

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Thank you for the reply...that's what makes SENSE to me and would seem to meet the intent.

 

I'd think there would be a way to do that. Turbo-tax doesn't seem to offer a way, tho, and everything I read leads me to believe that I cannot.

 

If it's true I do think that, at least, it's a good one for the FAQ's at 403(b).

 

 

 

Tax questions arising from software programs cannot be resolved in this forum.

 

See the instructions for Form 1040, P30 which has a worksheet that determines whether or not a deductible IRA contribution can be made for employees who participated in a retirement plan. You need to know what is your W-2 income for 2008 as well as your schedule C income.

 

As for SEP contributions see IRS publication 560 P5-6. Both documents are available @ irs.gov, tab- forms and publications.

 

You need to contribute to both plans by April 15th.

 

Canned tax software doesn't pick up all of the available deductions for retirement plan contributions and itemized deductions which is why answers should be checked against the IRS worksheets.

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