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Does Sharebuilder take into affect reinvested dividends? IF so (and this is a tax question) can I claim the higher amount as my 2007 IRA contribution?

Reinvested dividends are merely earnings that you have chosen to invest in the same company. Earnings within an IRA have no bearing on contributions and have no tax consequences until withdrawn from the IRA, which then count as ordinary income to the IRA owner.

If you have any plan with ShareBuilder beyond the Basic "free" plan, the monthly fee may be counted as contributions. If, for instance, you are on the Standard Plan at $12/month, that would add $144 to your yearly contribution totals. Following is a section from the ShareBuilder site:

What methods can be used to pay the IRA/ESA administration fee?

You can choose between four different methods to pay your IRA or ESA administration fee:

* Checking/saving account
* Check
* Credit Card
* Pay with account assets

To choose your method of payment, follow the instructions below:

1. Navigate to Accounts > Overview > IRA/ESA Administration (log in required).
2. In the Administration Fee section, click Edit Payment Preference.
3. Select payment method and click Save.

Note: This fee can be paid outside of normal account contributions, meaning that it may not apply to your annual contribution limit. To ensure that your payment is not considered a contribution, please follow all instructions for the selected payment option. Please wait to submit any fee payment until you receive your invoice via email.

Might I be so bold as to mention that IF this is the reason for your contribution differential, that you strongly consider going to the Basic plan. With only $65/month being contributed, paying a monthly fee to make automatic trades is self-defeating in terms of income generation for your retirement. That amounts to an 18.5% hit that you must overcome before actually making money with which to grow your retirement funds.

OTOH, if this has nothing to do with the different amounts for contributions, then your next call should be to customer service to figure out the discrepancy. Actually, you should call them anyway, just to verify that you have all the necessary facts and information on how to best manage your (wife's) account.

Best regards,
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