Message Font: Serif | Sans-Serif
No. of Recommendations: 6
I was told by my CPA of many years that I could not put $6000 into a SIMPLE as well as $2000 into a traditional IRA. I asked this question very clearly of him.

You may have asked it very clearly of him, but you didn't do so here. The statement made above and in your original post is wrong. I suspect, having peeked ahead in the thread, that you are speaking of deductibility, which is mentioned in neither this nor your original post. Different questions get different answers.

If your CPA told you that since the SIMPLE constitutes a retirement plan you couldn't deduct a traditional IRA contribution because of your AGI, he was probably right. I say "probably" because I assume he knows your AGI, which I don't. You can verify deductibility in the chart on page 8 of Pub 590.

Following your suggestion I will re-read Pub 590 (which I did read in advance of making the change and seemed to confirm my CPA's statement.

You misunderstand one part: I do not want to change (and did not do so)my SIMPLE in any way. That part's fine.)

I'm glad to hear that. An illegal conversion of part of the SIMPLE was the only real potential problem you had.

I'm only annoyed that I don't have the whole $2000 transferred to Roth from the traditional IRA (if indeed I can't fund a traditional AND a SIMPLE the same year.

If your AGI allows for a full $2,000 Roth contribution, it's probably not too late. It's not clear exactly what you did with respect to the traditional and the Roth, but if you recharacterized only a portion of your traditional contribution, you can still recharacterize the rest. A better course, since your investment has lost value, might be to treat the entire $2,000 traditional contribution as a nondeductible year 2000 contribution and do a conversion in 2001, thus taking advantage of the full $2,000 basis. Your CPA, looking at your entire situation, can advise you on this.

P.S. If my name was masculine instead of feminine would you have used this tone of voice with me?

You can bet on it. Once you get over being offended, go back and read what you originally wrote as if you'd never seen it before. Every statement of tax law that you made was either wrong or ambiguous. My poor manners would no doubt just raise your blood pressure, but if you like you can find many posts when I've taken men to task for being scatterbrained.

Phil Marti

P.S. I looked at your profile and thank God that you're an artist. We need artists a lot more than we need people who can rattle off tax law.

Print the post  


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.
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.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! 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.