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Author: jtsheldon Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1021  
Subject: IRA Contributions higher than what I expect Date: 2/17/2008 11:51 PM
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My wife's IRA is in Sharebuilder. Monthly we contribute $65.00

65 * 12 months is $780.00 yet on the ShareBuilder website the 2007 Contributions total is much higher than that.

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?

Thanks

JTS
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Author: jck101 Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 999 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/18/2008 12:39 AM
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Reinvested dividends don't count towards contributions, so I don't know what the deal is!

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Author: thomasgb One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1000 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/18/2008 10:16 AM
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Could it be the monthly fee is being counted as a contribution?

Another possibility is that it counted all your contributions this year as being towards 2007, since it is before the April 15 deadline for 2007 contributions.

You may want to contact Customer Service about this.

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Author: havefunsaving Big red star, 1000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1001 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/18/2008 5:42 PM
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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 Earnings within an IRA have no bearing on contributions and have no tax consequences until withdrawn from the IRA, which then count as ordinary income to the IRA owner.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,
Kathie

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Author: jtsheldon Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1002 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/20/2008 7:54 PM
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Thanks for the info, I think part of it is the payment fee. And yes it does look like 18% however this is the only account we pay for trading commissions, my IRA, my brokerage and VEST accounts have no charge for buying shares.

Thus add up all my monthly contributions and then have it divide into 12 it is around 2%

I am holding out with ShareBuilder hoping that with the merger of ING, there is some reduced rates for holding other ING products (hoping though not holding my breath)

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Author: havefunsaving Big red star, 1000 posts Old School Fool Ticker Guide Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1003 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/20/2008 11:03 PM
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Thus add up all my monthly contributions and then have it divide into 12 it is around 2%

Understood. However, if you have the other contributions buying stocks at a zero commission regardless of your Sharebuilder account fee, then you are still paying 18% of that particular account's contributions for the right to trade up to six times per month, which is a lot of trading for only $65/month contributed. Do you possibly get additional investing tools with the standard plan, not available through your other accounts, and you consider the $12/month a reasonable fee for those services?

Obviously, I may be missing something, and if this is your considered choice, then I don't want to step on your toes. But I thought I'd push just a little on the off chance that you decide your strategy could use some tweaking.

Best regards,
Kathie

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Author: jtsheldon Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1004 of 1021
Subject: Re: IRA Contributions higher than what I expect Date: 2/21/2008 9:15 PM
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The extra tools do come with the $12 fee but I you don't have all the info...my monthly stock purchase is $200.00 I am playing catch-up on my IRA and my cash balance covers more than the $200.00

So its not like I am depositing 65.00 then paying the $12.00, I realize at 6% for $200 is not the desired 3% or less but I may up the monthly stock purchase to reduce further

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