Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next
Author: stockmover Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121182  
Subject: ERRONEOUS CONTRIBUTION TO 1999 TRADITIONAL IRA Date: 9/6/2000 4:09 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
For the 1999 tax year I elected a filing status of married-filing separately for both me and my wife. Based on our individual incomes and deductions this filing status provided us a larger refund then filing married-jointly as we have done in the past. The larger refund was confirmed by using my What-If Worksheet within my Intuit Turbo Tax software. Unfortunately, what I overlooked (as well as my TURBO TAX SOFTWARE to my dismay) was that my $2000 IRA contribution [which was made in Feruary 1999] is not allowed due to my income being over $10,000. Fortunately I did not make an IRA contribution for my wife. I have not yet been audited by the IRS , but I am sure it's probably just a matter of time.

I have reviewed this message board for possible answers and have come to the conclusion that I will probably have to file an amended return [1040X] for my 1999 tax year. However, the trustee of my IRA is a discount brokerage firm and therefore I will probably have to provide them with some kind of form to withdraw my contribution plus any accumulated earnings on the $2000 (which is probably another can of worms) Based on my research, I don't qualify for a Roth IRA and even if I could somehow transfer the $2000 contribution to a Traditional Non-Deductible IRA, that still would not reduce my tax liability for 1999.

My question is? ...is there any other options available to me which I may have overlooked which would reduce or eliminate my additional tax liability which I roughly calculated to be a little less than $1000.00 ?
If I amend my return to a filing status of married-filing jointly my additional tax liability will be about $1400 even with the then eligible Traditional IRA! Any advice from TMFTaxes, TMF ExRO or any Knowledgeable FOOL would greatly be appreciated.

Although I accept responsibility for this error, I am really kind of PO'd that my TURBO TAX software did not at least RED-FLAG this error during it's "Final Review" of my tax forms for any errors or omissions. I have used Turbo Tax software for a couple of years now and until now, I have been very satisfied with its overall performance.

Thank You for your help.
TG
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (3) | Ignore Thread Prev | Next

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
Post of the Day:
Apple

Apple and Ninety Years Ago
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement