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        New Message Board Archives >> 2007 General Board Posts >> Taxes and 401K
        
(Message started by: chewy on Apr 9^th, 2007, 6:58am)

Title: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 6:58am

Anybody know if you can use 401K contibutions as a deduction?

Title: Re: Taxes and 401K
Post by Yorky on Apr 9^th, 2007, 7:41am

on 04/09/07 at 06:58:14, chewy wrote:

Anybody know if you can use 401K contibutions as a deduction?

not off djs paypal ;;D

appology.
chewy,dj.....i do not understand your tax etc.....

it was my feeble attempt at a bit of humour :-[

i also dont understand paypal?

i know "i have posted a lot lately......but 4 months prior...i was ere every day.....but did not post.
8 days little sleep, i am going mad...i have sat at this computer, all that time trying to learn more ?
as i am a builder (last computer i had was a ...sinclair spectrum)
i do not try to offend, and if i do i will appolagie.

i am just trying to put humour to clustervill (humour is keeping me sane)

i sent an im to you.....but you have blocked me.
i am sorry.

tony.

Title: Re: Taxes and 401K
Post by jimmers on Apr 9^th, 2007, 9:11am

I don't think you can.

Title: Re: Taxes and 401K
Post by purpleydog on Apr 9^th, 2007, 9:23am

No, you can't.

Title: Re: Taxes and 401K
Post by TonyG1 on Apr 9^th, 2007, 9:36am

No. IRAs -- yes.

Title: Re: Taxes and 401K
Post by BMoneeTheMoneeMan on Apr 9^th, 2007, 10:26am

A 401K Contribution IS a deduction. Its taken from the gross pay.

Title: Re: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 11:04am

Its deducted from my gross pay but I guess the contribution cant be used as a write off?

Is it only a Roth IRA that can be used as an end of year write off?

I'm getting killed by the IRS and need to find ways to redice my yearly taxable income.

Title: Re: Taxes and 401K
Post by fubar on Apr 9^th, 2007, 11:10am

no, it cannot be a write-off because your 401K contributions are still yours. You can't write something off if you still have it.

Title: Re: Taxes and 401K
Post by BMoneeTheMoneeMan on Apr 9^th, 2007, 11:16am

The amount you put in your 401k is tax deductable, however, its already been deducted for you.

For example, if you earn $1,000, but choose to deduct $100 from your gross pay for a 401k plan, your taxable wages are then only $900. You have "written off" your contribution and it is not taxable.

Look and see if there is a difference on your W-2s between your gross total wages and the medicare wages. The difference between these 2 is the amount you deducted on a pre-tax basis.

Title: Re: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 11:21am

Ok I got ya. Thanks.

Is thr Roth IRA the only one I can use as a write off to reduce my end of year taxable income?

I might as well sign the IRS up as the beneficiary to my life insurance!

Title: Re: Taxes and 401K
Post by BMoneeTheMoneeMan on Apr 9^th, 2007, 11:31am

The traditional IRA is the tax deductable one. The difference between a traditional and a roth is that the traditional IRA is a deduction now and taxable later, a roth is taxable now but not taxable later.......IE when you start to withdraw from it, it is tax free.

Title: Re: Taxes and 401K
Post by alienspacebabe on Apr 9^th, 2007, 11:38am

Roth IRA is not deductible.

Traditional IRA is deductible (within income limits).

Title: Re: Taxes and 401K
Post by Jackie on Apr 9^th, 2007, 4:12pm

Hey Chew....

Talk to your CPA...it's not to late to make an IRA contribution and deduct it on this years taxes....But you have to have the contribution made by April 15th (or whenever the deadline is this year).

I'm thinking you can still make a $4.000 to $5,000 contribution even though you have a 401K....
I'm no accountant though... :P

Title: Re: Taxes and 401K
Post by artonio7 on Apr 9^th, 2007, 4:18pm

on 04/09/07 at 16:12:45, Jackie wrote:

Time for a shameless plug for O.U.C.H. a non-profit organization always happy to receive a contribution. ;;D

with warm regards,
Tony

Title: Re: Taxes and 401K
Post by fubar on Apr 9^th, 2007, 4:39pm

Here are the 3 main differences in traditional IRA versus Roth IRA

Contributions
Traditional IRA: Regular contributions may be deductible
Roth IRA: No deduction

Growth of Earnings
Traditional IRA: Tax deferred
Roth IRA: Tax exempt

Taxability of Withdrawals
Traditional IRA: Included in taxable income
Roth IRA: Tax-free for qualified distributions

What it means is this...

Roth IRA contributions have no impact on your taxable income. So, you are putting money in that has already been taxed. When you take it out, you don't get taxed on it again unless you take it out before retirement (then you generally pay a penalty). The upside is this... if the money grows while it is in the Roth IRA, that income (the growth) is tax-free. If your Roth IRA investment does really well, it's all tax-free assuming you don't take it out until you're old.

Regular IRA contributions do reduce your taxable income, so your investment is pre-tax. You get taxed when you take it out, generally when you're in a lower tax bracket. All of the distributions from a regular IRA are taxed (even the growth income) when you pull them out. You have to pay penalties if you pull it out early.

-Fu

Title: Re: Taxes and 401K
Post by BarbaraD on Apr 9^th, 2007, 4:59pm

Don,

Form 8880 -- Depending on your income.. Try that one - you might be eligible to take a deduction on it. It's a little known form that most people (including a lot of CPA's don't know about). It came into being a couple of years ago.

And don't forget the telephone credit -- $30 is $30.

And if you've replaced any appliances or done any remodeling on your home don't forget the energy savings credit. You can rake up about $500 without breaking a sweat.

That's about all I can think of right now without knowing where you are on your taxes. If you need any help PM me.

Hugs BD

Title: Re: Taxes and 401K
Post by Jackie on Apr 9^th, 2007, 5:13pm

OK.....question....

Does installing a new wood burner insert qualify for the 'energy savings credit'....

Title: Re: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 5:27pm

You guys are the best!

What it boils down to is I need to open a traditional IRA, I may still have time to contribute to it for this tax year, and I use the 8880 form to document the deduction.

Why did I not seek a career in Financial Managment? Simple. Because all of my clients, as well as myself, would end up in Federal prison.

I suck. 8)

Love
Chewy

Title: Re: Taxes and 401K
Post by artonio7 on Apr 9^th, 2007, 5:30pm

on 04/09/07 at 17:27:08, chewy wrote:

<snip>I suck. 8)

Love
Chewy

ummmmm... errm... hmmmm. ::) never mind.

with warm regards,
Tony

Title: Re: Taxes and 401K
Post by Yorky on Apr 9^th, 2007, 6:40pm

on 04/09/07 at 07:41:22, Yorky wrote:

?
i sent an im to you.....but you have blocked me

Title: Re: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 7:19pm

I dont have you blocked York.

Title: Re: Taxes and 401K
Post by Yorky on Apr 9^th, 2007, 7:30pm

on 04/09/07 at 19:19:16, chewy wrote:

I dont have you blocked York.

no you do not (sorry)

dont know why it was saying that?

sorry i will delete the other post

CHEWYS SOUND.........YORKYS THICK

[smiley=bow.gif]

Title: Re: Taxes and 401K
Post by chewy on Apr 9^th, 2007, 7:34pm

Quote:

CHEWYS SOUND.........YORKYS THICK

LMAO!
If I'm the standard for "sound" then we are all in deep shit!