hello, my wife and i are going to get killed in taxes this year because our Daughter needs to claim herself on her own so she can get student loans for college next year. I have 401k money still sitting in an account where it was 5yrs ago when i changed jobs. nothing gets added to this. At my work they have a pension fund where they put away 15% of your gross wages into it for you and we don't contribute anything to it and can't. so no real deductions for me off my gross income. my Wife however does have a 401k and does contribute to it. ineed some advice please as far as Roth's,etc please we certainly need to get a better handle on our finances and will do so this year for sure. thanks
Thu Dec 31, 2009 3:12 pm
oldguy Senior Member
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quote: ineed some advice please as far as Roth's,etc
Roths are a good idea but they have no effect on your income taxes.
Your wife's 401k gives you a tax break - so increasing that contribution will be a help next year.
As for your 5 yr old 401k, I would roll it to a Rollover IRA at a no-load company such as Vanguard and get that money working for you.
I don't know about getting killed on taxes - but losing a dependant will probably cost about $550.
Thu Dec 31, 2009 5:34 pm
coaster Senior Advisor
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The 15% pension contribution isn't taxed, is it?
(ie when you get your W-2 it shows your income NET of the pension contributions, because they're "taken out before tax")
Agreed with the above advice.
~Tim~
Thu Dec 31, 2009 7:22 pm
randypape New Member
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taxes
no i don't believe its taxed. all i know its a self funded pension fund solely contributed to by the company to help keep long term employees. i get a statement every 6 months and they say if you quit they have up to 4yrs to give you your money,not sure what thats about or legal? thanks for the replies.
Thu Dec 31, 2009 10:10 pm
coaster Senior Advisor
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A sponsor of a tax-deferred defined contribution retirement plan can pretty much place whatever terms and restrictions they want.
As far as tax planning for next year, I use TurboTax not just for tax prep but also for tax planning. For example, I needed to make some decisions on what taxes to pay before the end of the year and whether or not to sell one of my stocks, and so I just run the what-if scenario through TurboTax and it instantly shows me what the tax consequences are. Yes, it's the 2008 program I've been using through 2009, so the actual numbers are going to be different if tax law changes, but it's good enough to make those decisions through the year. At least I'm not totally in the dark as to what my return in April is going to be. And if no surprises, then I'm not caught short.
~Tim~
Fri Jan 01, 2010 1:28 am
randypape New Member
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taxes
hello again, that's what i kinda heard about it. my last question is what type of roth or traditional IRA,etc am i allowed to engage in seeing i do have this company sponsored plan, i could contribute something before april 15th this year? thanks Randy
Fri Jan 01, 2010 2:26 pm
coaster Senior Advisor
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You can set up whatever you want, but tax-deferred contributions are going to be limited depending on income and amount of contributions to your employer plan. So I think a Roth would be the best option. I'm kind of hazy on this point, though: it might be too late to open a new account for 2009 contributions.
There's actually quite a bit of readable and understandable (surprise!) information on the IRS website with a fairly good (double surprise!) search engine. Keywords like "qualified retirement plans" and "IRA contributions" should bring up articles and publications on your topics.
~Tim~
Fri Jan 01, 2010 4:12 pm
randypape New Member
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taxes
thanks for your replies Mr. coaster i will check these out and Happy New Year to you.
Fri Jan 01, 2010 4:18 pm
john milton Member
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save tax
hi
i am john milton
if you want to safe your tax
my suggestion is you can take
a insurance policy
Wed Apr 14, 2010 9:09 am
pimarwan Member
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Hey John Milton its a great idea. thanks for giving this idea. it makes us rich fast.
Thu Apr 15, 2010 10:49 am
prioritytaxgroup Contributing Member
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Tax rules allow you to contribute up to $2,000 more than what you're eligible to contribute to your RRSP without attracting the usual excess contribution penalty, which is one per cent of the excess amount for every month of the contribution year that it stays in the RRSP.
i will check these out and Happy New Year to you.
