Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 1
<<<< If I can earn 15% annually on that money, and I'm paying 6% annually in the form of tax, do I get the rest tax free? If I earn more than 15% on the assets, and I'm in the highest tax bracket, this would easily work to my advantage. It would allow one to shelter short term gains and not pay as much tax as one would pay if they were in a taxable account. >>

One other point on this issue...if you try it, you're running a BIG risk. An overcontribution is always an overcontribution. And if IRS finds out about it, they can FORCE you to remove the funds and associated earnings...thereby causing you some big tax and penalty problems.

And, not only that, unless your IRA administrator is a complete dummy, they won't let you make...say...a $50,000 contribution to your IRA...when the annual limit is $2k. You could lie to them, of course, and say that it was a rollover. But because of the paperwork required (and reports required to be filed with the IRS by the administrator), it could tip the IRS off to your little plan. And, since there is not "statute of limitations" to requiring the removal of the overcontribution, Uncle Sammy wouldn't necessarily be in any hurry to check you out.

Don't do it. Please.

TMF Taxes
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.
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.
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.