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#1
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IRAs?
I just thought I'd remind anybody who may have not funded an IRA for last year that the deadline for 2008 contributions is Wednesday.
I'm getting pretty short of funds lately, but when I saw how much I was going to have to pay on top of the taxes I'd had withheld this year, I bit the bullet and maxed out my contribution for 2008 ($6,000.00 if you're 50 or over). Doing so saved me close to $1700. I'd rather give it to myself than to the gubmint.
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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century OBK #55 1998 Lincoln Continental - Sold Max 1984 300TD 285,000 miles - Sold The Dee8gonator 1987 560SEC 196,000 miles - Sold Orgasmatron - 2006 CLS500 90,000 miles 2002 C320 Wagon 122,000 miles 2016 AMG GTS 12,000 miles |
#2
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And since you're over 50, you won't have to wait to long to get your hands on the money with no penalties at age 59.5.
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#3
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Saving $1700 is an interesting question. Assuming you don't have a Roth and you don't start taking withdrawls for some years, one has to consider how much the tax will be at withdrawl time - especially in view of the higher taxes we will all be paying to cover the current financial sector bailout.
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Don't Chrome them; polish them |
#4
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Having a good mix of Savings, Roths and Traditional IRA's makes playing the future tax game easier.
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Terry Allison N. Calif. & Boca Chica, Panama 09' E320 Bluetec 77k (USA) 09' Hyundai Santa Fe Diesel 48k (S.A.) |
#5
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I don't worry about it-- I just go to Hashim's fruit market and buy more cash that they print in the basement. Best time is when it's down to 10 cents on the dollar.
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Strelnik Invest in America: Buy a Congressman! 1950 170SD 1951 Citroen 11BN 1953 Citroen 11BNF limo 1953 220a project 1959 180D 1960 190D 1960 Borgward Isabella TS 2dr 1983 240D daily driver 1983 380SL 1990 350SDL daily driver alt 3 x Citroen DS21M, down from 5 3 x Citroen 2CV, down from 6 |
#6
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Doesn't the one time IRA contribution deduction get phased out with higher income?
PS. I hate our tax system and the mental slavery it creates.
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1985 380SE Blue/Blue - 230,000 miles 2012 Subaru Forester 5-speed 2005 Toyota Sienna 2004 Chrysler Sebring convertible 1999 Toyota Tacoma |
#7
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Quote:
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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century OBK #55 1998 Lincoln Continental - Sold Max 1984 300TD 285,000 miles - Sold The Dee8gonator 1987 560SEC 196,000 miles - Sold Orgasmatron - 2006 CLS500 90,000 miles 2002 C320 Wagon 122,000 miles 2016 AMG GTS 12,000 miles |
#8
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OT: The thread title made me think of the provisional Irish Republican Army and their bonehead offshoot "Real IRA."
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Whoever said there's nothing more expensive than a cheap Mercedes never had a cheap Jaguar. 83 300D Turbo with manual conversion, early W126 vented front rotors and H4 headlights 400,xxx miles 08 Suzuki GSX-R600 M4 Slip-on 22,xxx miles 88 Jaguar XJS V12 94,xxx miles. Work in progress. |
#9
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Best thing going as far as it's worked out for me! |
#10
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Starting today, I am self-employed. I tried this once before, many years ago before the advent of the SEP-IRA. Hopefully, this will work out well enough that I'll be able to defer the taxes on the entire $48-50,000 allowable. We'll see. At any rate, the allowable ceiling is MUCH higher than it would be if I was working for someone else.
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" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century OBK #55 1998 Lincoln Continental - Sold Max 1984 300TD 285,000 miles - Sold The Dee8gonator 1987 560SEC 196,000 miles - Sold Orgasmatron - 2006 CLS500 90,000 miles 2002 C320 Wagon 122,000 miles 2016 AMG GTS 12,000 miles |
#11
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Going from memory here.
The SEP has a very high contribution limit but it is a strict profit-sharing plan and the limit (high $40K's as you mention) cannot exceed 25% of your earnings. (That's if you earn on a W-2. If you are a partnership or sole proprietor there is a more complex calculation that determines your maximum contribution) So you would have to pay yourself @ $200K to benefit fully from the SEP. There are other options that might suit your situation better.
Check with your tax or financial adviser for more detail or PM or e-mail me.
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1983 M-B 240D-Gone too. 1976 M-B 300D-Departed. "Good" is the worst enemy of "Great". |
#12
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Here is my understanding of SEP IRAs: 1) The SEP has no dollar contribution limit. It is based on percentage only. 2) It is not always a strict profit-sharing plan. I have a SEP IRA, and I am not under any profit-sharing plan for my business. 3) The limit is definitely not the high $40Ks per individual. There is no cap that I'm aware of. 4) It may have changed, but I thought 15% of net self-employed income (with no income cap) was the annual maximum percentage saving limit. 5) A SEP has absolutely nothing to do with a W-2. 6) There is no more complex calculation just because you are a sole proprietor, or partnership. It only depends on how much you earn. 7) Earning as much as $200K would not have anything to do with the percentage you can sock away for yourself. -Since 15% of $200K is $30K, which is a whole lot more than the $6,000.00 present cap for a self-directed, or Roth IRA. There are income caps limiting ones's eligibility to participate in Roth IRAs. The facts is, if you are making the big bucks, a SEP is the way to go, for that particular year. If not, a Roth is usually the better small IRA tool for that year. Anybody can look up the IRS' tax code on-line and check their own situation. Last edited by Skid Row Joe; 04-13-2009 at 02:06 PM. |
#13
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I'll concede #2. I misspoke regarding the profit-sharing aspect. It is sometimes tied to profit-sharing but not always. http://www.irs.gov/retirement/article/0,,id=111419,00.html Interested to know where you get your "understanding" of a SEP. Here's where to look.
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1983 M-B 240D-Gone too. 1976 M-B 300D-Departed. "Good" is the worst enemy of "Great". Last edited by cjlipps; 04-13-2009 at 02:37 PM. |
#14
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I also "recommended the IRS' website." Good luck! |
#15
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Max contributions for SEP's
2008 = $46,000 2009 = $49,000 |
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