I have had a dozen phone calls from individuals asking about
their IRA contributions in the last week. This is the definitive
answer.
david
IRS Tax Tips
March 28, 2006
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Issue Number: AT-2006-61
Inside This Issue
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YOU CAN STILL MAKE A 2005 IRA CONTRIBUTION
If you haven’t contributed funds to an Individual
Retirement Arrangement for tax year 2005, or if you’ve put in
less than the maximum allowed, you still have time to do so. You
can contribute to either a traditional or Roth IRA until the
April due date for filing your tax return for 2005, not including
extensions.
Be sure to tell the IRA trustee that the contribution is
for 2005. Otherwise, the trustee may report the contribution as
being for 2006 when they get your funds.
Generally, you can contribute up to $4,000 of your earnings
for 2005 or up to $4,500 if you are age 50 or older in 2005. You
can fund a traditional IRA, a Roth IRA (if you qualify), or both,
but your total contributions cannot be more than these amounts.
a.. Traditional IRA You may be able to take a tax
deduction for the contributions to a traditional IRA, depending
on your income and whether you — or your spouse, if filing
jointly — are covered by an employer’s pension plan
b.. Roth IRA: You cannot deduct Roth IRA contributions,
but the earnings on a Roth IRA may be tax-free if you meet the
conditions for a qualified distribution
You can file your tax return claiming a traditional IRA
contribution before the contribution is actually made. However,
the contribution must be made by the due date of your return, not
including extensions. If you report a contribution to a
traditional IRA on your return, but fail to contribute by the
deadline, you must file an amended tax return by using Form
1040X, Amended U.S. Individual Income Tax Return. You must add
the amount you deducted to your income on the amended return and
pay the additional tax accordingly.
For more information get IRS publication 590, Individual
Retirement Arrangements (IRAs), available at IRS.gov or by
calling 1-800-TAX-FORM (1-800-829-3676). Taxpayers who need any
IRS publication should act soon to be sure they have the item in
time to meet the April due date.
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David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa
Specialists
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Calls welcomed from 10 AM to 10 PM 7 days a week Vancouver (LA)
time - (please do not fax or phone outside of those hours as
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email to taxman at centa.com
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as
advice in any particular circumstances. No contract exists
between the reader and the author and any and all non-contractual
duties are expressly denied. All readers should obtain formal
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Be ALERT, the world needs more "lerts"
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assistance expert preparation & immigration consultant david
ingram, experts on rentals mutual funds RRSP RESP IRA 401(K) &
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