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Pre-tax smuggling??


Dirtyhip

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It looks like we won't hit the 18K per person pre-tax  maximum deduction in our 403b for 2017.  I have modified the deduction, but it takes time to take effect.  I was wondering if you can invest in an IRA yourself, and the monies would be considered a tax deduction, once you square everything up during April tax-time.  

Do you fools know anything about this?  I have a call into the tax lady, and I am impatient.

:)

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22 minutes ago, Dirtyhip said:

Do you fools know anything about this?  I have a call into the tax lady, and I am impatient.

 

No but......  I seem to remember a reg that said that if you were involved in a employer sponsored plan that you could not invest pretax money in a personal plan.  Post tax (Roth) was OK.  But again I am not a tax accountant and I'm digging this up from an aging neuron bank......  

Sorry no real help here.

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11 minutes ago, Kzoo said:

No but......  I seem to remember a reg that said that if you were involved in a employer sponsored plan that you could not invest pretax money in a personal plan.  Post tax (Roth) was OK.  But again I am not a tax accountant and I'm digging this up from an aging neuron bank......  

Sorry no real help here.

our Roths are maxxed.  it seems that the rules are just the 18k, per person. although, I am not a tax attorney. 

Next year looms better, but I need to stash some cash. The future tax bracket seems much better, I  retirement.

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7 minutes ago, Dirtyhip said:

our Roths are maxxed.  it seems that the rules are just the 18k, per person. although, I am not a tax attorney. 

Next year looms better, but I need to stash some cash. The future tax bracket seems much better, I  retirement.

Won't hit the $18k? What does that mean? By Dec 31st?  Can't you keep contributing to 2017 stuff up until April 2018?  We generally do my wife's SEP at the time of our tax return - ie March-ish.  

I think a tax adviser would have a better answer, so keep plugging and sock that cash away!

Tom

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49 minutes ago, Dirtyhip said:

It looks like we won't hit the 18K per person pre-tax  maximum deduction in our 403b for 2017.  I have modified the deduction, but it takes time to take effect.  I was wondering if you can invest in an IRA yourself, and the monies would be considered a tax deduction, once you square everything up during April tax-time.  

Do you fools know anything about this?  I have a call into the tax lady, and I am impatient.

:)

Huh?  You might as well be talking all the "Schralping seat post dropper, front fork belt drive turn-table" weird mountain bike lingo for all I understood about what you just said.

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57 minutes ago, Razors Edge said:

Won't hit the $18k? What does that mean? By Dec 31st?  Can't you keep contributing to 2017 stuff up until April 2018?  We generally do my wife's SEP at the time of our tax return - ie March-ish.  

I think a tax adviser would have a better answer, so keep plugging and sock that cash away!

Tom

Not if it's employer based (pretax PR deduction). Some employers only allow you to set or change your standard deduction once in a calendar year.  In our plan you can change is as often as you like.  Maybe @Dirtyhip's employer will as well but I assuming she's already checked.

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1 minute ago, Kzoo said:

Not if it's employer based (pretax PR deduction). Some employers only allow you to set or change your standard deduction once in a calendar year.  In our plan you can change is as often as you like.  Maybe @Dirtyhip's employer will as well but I assuming she's already checked.

Rats.  That seems sucky considering two and a half months is a relatively large chunk of the year, and people actually should be ENCOURAGED to save for retirement, not have dopey restrictions slowing them down.  But your answer makes sense.  

Tom

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15 minutes ago, Kzoo said:

Not if it's employer based (pretax PR deduction). Some employers only allow you to set or change your standard deduction once in a calendar year.  In our plan you can change is as often as you like.  Maybe @Dirtyhip's employer will as well but I assuming she's already checked.

I recently moved the amounts up to 55%, but it still leaves a small remainder, because I didn't do it early enough in the year.  Once 2017 ends, your contributions are toward 2018.  I am not sure how to catch up that little bit of residual.  

1 hour ago, Zephyr said:

Huh?  You might as well be talking all the "Schralping seat post dropper, front fork belt drive turn-table" weird mountain bike lingo for all I understood about what you just said.

I am talking about some hard core adulting over here.  I am actually talking a lot more about retirement.  Where the hell did that young shralp queen go?  WTF?!!?

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I'm no tax expert, so you should confirm this on your own, but based on this chart on the IRS website, it appears if you are covered by an employer 401(k) or similar plan, the deduction for an IRA gets phased out at certain income levels.  You can still contribute up to the limit, but the amounts won't be tax deductible.   However, the maximum IRA contribution per year is based on total Roth and non-Roth contributions according to this page on the IRS website.   So $5,500 is the maximum for both Roth and traditional IRAs ($6,500 if you're over 50).

So if you've already contributed the max to your Roth IRAs, it appears you can't also contribute to a traditional IRA, even if you don't use your full permitted amount in a 401(k).

But I don't even do my own taxes, so don't rely on what I found.

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