stepping_up_IHB
New member
where else in the world could you make the kind of income that you do here in the US and pay lower taxes with more benefits than we get here?
What is your effective tax rate?
- Thread starter ocorbust_IHB
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ocorbust_IHB
New member
[quote author="MacInThebox" date=1239941408][quote author="ipoplaya" date=1239887837][quote author="MacInThebox" date=1239882392] I have mortgage (360k) interest to write off and maxed 2 IRAs.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
No_Such_Reality_IHB
New member
The benefits we get aren't from taxes, it's from the lack of a structured social caste system of serfs and lords.
irvinesinglemom_IHB
New member
I am a little skeptical about the $70 bottle of ophthalmic antibiotic. I have been in the pharma/biotech manufacturing industry for my entire career and spent part of that time working at one of the top three ophthalmic drug/device firms in the U.S. Could it be that your doctor had to order a highly specialize medicine for you because you have some extremely drug resistant strain of infection? Because the standard treatment for eye infections - say, gentamicin, for example, costs a LOT less than $70 a bottle. (Or, you bought extremely specialized, rare medicine along with having a crapola insurance plan?). Hmmmm....just sayin'
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...
usctrojanman29_IHB
New member
[quote author="stepping_up" date=1239967007]where else in the world could you make the kind of income that you do here in the US and pay lower taxes with more benefits than we get here?</blockquote>
Dubai...but no way in hell would I want to live here.
Dubai...but no way in hell would I want to live here.
macinthebox_IHB
New member
[quote author="ocorbust" date=1239967980][quote author="MacInThebox" date=1239941408][quote author="ipoplaya" date=1239887837][quote author="MacInThebox" date=1239882392] I have mortgage (360k) interest to write off and maxed 2 IRAs.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.
macinthebox_IHB
New member
[quote author="irvinesinglemom" date=1239971293]I am a little skeptical about the $70 bottle of ophthalmic antibiotic. I have been in the pharma/biotech manufacturing industry for my entire career and spent part of that time working at one of the top three ophthalmic drug/device firms in the U.S. Could it be that your doctor had to order a highly specialize medicine for you because you have some extremely drug resistant strain of infection? Because the standard treatment for eye infections - say, gentamicin, for example, costs a LOT less than $70 a bottle. (Or, you bought extremely specialized, rare medicine along with having a crapola insurance plan?). Hmmmm....just sayin'
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...</blockquote>
If my eye infection was extremely drug resistant, my doctor did not tell me, and he seemed pretty thorough when he examined me. He just told me it's quite common and nothing to worry about.
As far as the cost of the drug goes, there is a rational for everything. You can tell me why it costs so much, but if you look around other countries, like Canada, drugs cost significantly less. I feel we are getting into politics here, which is pointless. I am just saying we should expect better. Obama's tax increase is fine, if he can fix our healthcare system and social security.
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...</blockquote>
If my eye infection was extremely drug resistant, my doctor did not tell me, and he seemed pretty thorough when he examined me. He just told me it's quite common and nothing to worry about.
As far as the cost of the drug goes, there is a rational for everything. You can tell me why it costs so much, but if you look around other countries, like Canada, drugs cost significantly less. I feel we are getting into politics here, which is pointless. I am just saying we should expect better. Obama's tax increase is fine, if he can fix our healthcare system and social security.
irvinesinglemom_IHB
New member
[quote author="MacInThebox" date=1239977791][quote author="irvinesinglemom" date=1239971293]I am a little skeptical about the $70 bottle of ophthalmic antibiotic. I have been in the pharma/biotech manufacturing industry for my entire career and spent part of that time working at one of the top three ophthalmic drug/device firms in the U.S. Could it be that your doctor had to order a highly specialize medicine for you because you have some extremely drug resistant strain of infection? Because the standard treatment for eye infections - say, gentamicin, for example, costs a LOT less than $70 a bottle. (Or, you bought extremely specialized, rare medicine along with having a crapola insurance plan?). Hmmmm....just sayin'
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...</blockquote>
If my eye infection was extremely drug resistant, my doctor did not tell me, and he seemed pretty thorough when he examined me. He just told me it's quite common and nothing to worry about.
As far as the cost of the drug goes, there is a rational for everything. You can tell me why it costs so much, but if you look around other countries, like Canada, drugs cost significantly less. I feel we are getting into politics here, which is pointless. I am just saying we should expect better. Obama's tax increase is fine, if he can fix our healthcare system and social security.</blockquote>
All I'm sayin' is, I find it highly suspect that you had a $70 copay for a standard bottle of ophthalmic antibiotic solution. If you really paid that much, well, I think you might benefit from learning how to comparison shop. (Yes, you certainly can comparison shop for medicine! Go to Costco, go to Walmart, see what they would have charged you.) Or, ask your doctor for a generic equivalent. We used to run the SAME EXACT product on our filling lines, just switching over the labeling, from our branded stuff to the generic stuff. Not that this is true for all generics, but for eyedrops it is not at all uncommon.
FWIW, I know a little something about the costs that go into making that bottle of eye drops. You're not really paying for the materials or the labor - although again, for some specialized drugs, the Active Pharmaceutical Ingredient costs can be insane. Like $100s or even $1000s per mL for some oncologics, for example. Mostly you're paying for the fact that the domestic drug industry subsidizes the entire planet with R&D outlays of billions on drug discovery projects that end up in the reject pile...oh yeah and also the manufacturing controls (aka GMPs) that are hugely expensive but ensure that your pill or drop doesn't contain like, you know, rat poison along with your active ingredient. Again, just sayin'...</blockquote>
If my eye infection was extremely drug resistant, my doctor did not tell me, and he seemed pretty thorough when he examined me. He just told me it's quite common and nothing to worry about.
As far as the cost of the drug goes, there is a rational for everything. You can tell me why it costs so much, but if you look around other countries, like Canada, drugs cost significantly less. I feel we are getting into politics here, which is pointless. I am just saying we should expect better. Obama's tax increase is fine, if he can fix our healthcare system and social security.</blockquote>
All I'm sayin' is, I find it highly suspect that you had a $70 copay for a standard bottle of ophthalmic antibiotic solution. If you really paid that much, well, I think you might benefit from learning how to comparison shop. (Yes, you certainly can comparison shop for medicine! Go to Costco, go to Walmart, see what they would have charged you.) Or, ask your doctor for a generic equivalent. We used to run the SAME EXACT product on our filling lines, just switching over the labeling, from our branded stuff to the generic stuff. Not that this is true for all generics, but for eyedrops it is not at all uncommon.
irvine123_IHB
New member
[quote author="ipoplaya" date=1239887837][quote author="MacInThebox" date=1239882392] I have mortgage (360k) interest to write off and maxed 2 IRAs.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
SEP - IRA ( if you qualify) allow to contribute up to 25% of your net business income ( after expenses, and with some other adjustments on self employment tax, so net net it is more like 20% max). If you are willing and able to max it, helps a lot on your tax situation. That is what we did to bring our effective fed tax rate down. I don't track CA, or even dive into my CA tax return, just let turbox tax do its thing based on my fed input, and answer questions on the screen. I consider my CA tax a weather tax, and just pay it
Also, not sure if you use the "deductIT" function of the TurboTax. I found it very usefulful to help me to quickly put a value on my donation. i believe this is the first year that it included as part of the turbox tax. Before it was too much trouble to itemize, and figure out a value, so I only put in the large items.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
SEP - IRA ( if you qualify) allow to contribute up to 25% of your net business income ( after expenses, and with some other adjustments on self employment tax, so net net it is more like 20% max). If you are willing and able to max it, helps a lot on your tax situation. That is what we did to bring our effective fed tax rate down. I don't track CA, or even dive into my CA tax return, just let turbox tax do its thing based on my fed input, and answer questions on the screen. I consider my CA tax a weather tax, and just pay it
Also, not sure if you use the "deductIT" function of the TurboTax. I found it very usefulful to help me to quickly put a value on my donation. i believe this is the first year that it included as part of the turbox tax. Before it was too much trouble to itemize, and figure out a value, so I only put in the large items.
blackvault_IHB
New member
[quote author="usctrojanman29" date=1239972085][quote author="stepping_up" date=1239967007]where else in the world could you make the kind of income that you do here in the US and pay lower taxes with more benefits than we get here?</blockquote>
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.
usctrojanman29_IHB
New member
[quote author="BlackVault CM2" date=1240012043][quote author="usctrojanman29" date=1239972085][quote author="stepping_up" date=1239967007]where else in the world could you make the kind of income that you do here in the US and pay lower taxes with more benefits than we get here?</blockquote>
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.</blockquote>
Dubai is the poster child of bubble real estate market and market excesses. It will go down in flames, you already see the cracks with the current downturn.
If you can handle the heat, you should consider Vegas but it isn't a great place to raise kids...especially since it has no state income tax..becomes important as you move up the income scale (so maybe a second home might be in order).
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.</blockquote>
Dubai is the poster child of bubble real estate market and market excesses. It will go down in flames, you already see the cracks with the current downturn.
If you can handle the heat, you should consider Vegas but it isn't a great place to raise kids...especially since it has no state income tax..becomes important as you move up the income scale (so maybe a second home might be in order).
tmare_IHB
New member
[quote author="BlackVault CM2" date=1240012043][quote author="usctrojanman29" date=1239972085][quote author="stepping_up" date=1239967007]where else in the world could you make the kind of income that you do here in the US and pay lower taxes with more benefits than we get here?</blockquote>
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.</blockquote>
Did you not read the Dubai thread? The place is a crumbling mirage, filled with indentured servants and ex-pats who can't leave.
Dubai...but no way in hell would I want to live here.</blockquote>
If I can convince my wife...I would live there in a heart beat. But I can't and never will.</blockquote>
Did you not read the Dubai thread? The place is a crumbling mirage, filled with indentured servants and ex-pats who can't leave.
ipoplaya_IHB
New member
[quote author="MacInThebox" date=1239941408][quote author="ipoplaya" date=1239887837][quote author="MacInThebox" date=1239882392] I have mortgage (360k) interest to write off and maxed 2 IRAs.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Based on the income level you claim, any deduction you could have had for a contribution to a traditional IRA would have probably been phased-out, i.e. those dollars would be taxed now for you... It would appear you are either mistaken about your income or the deductibility of your traditional IRA contribution.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Based on the income level you claim, any deduction you could have had for a contribution to a traditional IRA would have probably been phased-out, i.e. those dollars would be taxed now for you... It would appear you are either mistaken about your income or the deductibility of your traditional IRA contribution.
ipoplaya_IHB
New member
[quote author="MacInThebox" date=1239977093][quote author="ocorbust" date=1239967980][quote author="MacInThebox" date=1239941408][quote author="ipoplaya" date=1239887837][quote author="MacInThebox" date=1239882392] I have mortgage (360k) interest to write off and maxed 2 IRAs.
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?
</blockquote>
How does maxing out two IRAs help your tax situation? What kinds of IRAs were these?</blockquote>
Well, the money you put in IRA (regular) are not taxed now... I don't qualify for Roth IRA.</blockquote>
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?
stepping_up_IHB
New member
I noticed that this year even though both hubby and I have work 401K's (mine the individual) that this year it said that we could contribute to our regular IRA's. It wasn't the full amount, but I know that last year it said we weren't eligible to contribute anything to them.
macinthebox_IHB
New member
[quote author="ipoplaya" date=1240032061][quote author="MacInThebox" date=1239977093][quote author="ocorbust" date=1239967980]
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.
usctrojanman29_IHB
New member
[quote author="MacInThebox" date=1240048761][quote author="ipoplaya" date=1240032061][quote author="MacInThebox" date=1239977093][quote author="ocorbust" date=1239967980]
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
You are not phased out of the IRA deduction as long as you were not able to participate in a company sponsored 401k program (assuming you are an employee). If you did participate in your employer's 401k program then there are phase-outs (I was phased out).
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
You are not phased out of the IRA deduction as long as you were not able to participate in a company sponsored 401k program (assuming you are an employee). If you did participate in your employer's 401k program then there are phase-outs (I was phased out).
ipoplaya_IHB
New member
[quote author="MacInThebox" date=1240048761][quote author="ipoplaya" date=1240032061][quote author="MacInThebox" date=1239977093][quote author="ocorbust" date=1239967980]
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
Anyone can contribute to a traditional IRA up to the contribution limit. It does not matter what your income is... The question is whether or not that contribution is tax deductible.
<a href="http://www.moneybluebook.com/traditional-and-roth-ira-contribution-limits-and-income-phase-outs/">Section 4 here is the pertinent information.</a> If both you and your spouse are not covered under an employer sponsored plan and you filed jointly, it would appear that the deductibility of your $5K contribution would be completely phased out at an income of $169K. You might want to confirm this with your tax accountant. I'm an accountant but do not specialize in taxation.
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
Anyone can contribute to a traditional IRA up to the contribution limit. It does not matter what your income is... The question is whether or not that contribution is tax deductible.
<a href="http://www.moneybluebook.com/traditional-and-roth-ira-contribution-limits-and-income-phase-outs/">Section 4 here is the pertinent information.</a> If both you and your spouse are not covered under an employer sponsored plan and you filed jointly, it would appear that the deductibility of your $5K contribution would be completely phased out at an income of $169K. You might want to confirm this with your tax accountant. I'm an accountant but do not specialize in taxation.
centralcoastobserver_IHB
New member
Back to the eye drop issue.... he probably had a prescription for some quinolone type antibiotic, such as Cipro. That could cost $70 or $80, because it's not on the formulary for most insurance programs. It's not "formulary" because there's not much evidence that Cipro eye drops work any better than Gentamycin eye drops, which would retail for about $20, and be covered under most insurance plans. Don't blame the health care insurance system for this one, blame the MD's who always seem to want to order the newest toys.
macinthebox_IHB
New member
[quote author="ipoplaya" date=1240051164][quote author="MacInThebox" date=1240048761][quote author="ipoplaya" date=1240032061][quote author="MacInThebox" date=1239977093][quote author="ocorbust" date=1239967980]
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008</blockquote>
I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
Anyone can contribute to a traditional IRA up to the contribution limit. It does not matter what your income is... The question is whether or not that contribution is tax deductible.
<a href="http://www.moneybluebook.com/traditional-and-roth-ira-contribution-limits-and-income-phase-outs/">Section 4 here is the pertinent information.</a> If both you and your spouse are not covered under an employer sponsored plan and you filed jointly, it would appear that the deductibility of your $5K contribution would be completely phased out at an income of $169K. You might want to confirm this with your tax accountant. I'm an accountant but do not specialize in taxation.</blockquote>
Ok. I think I figured it out. The tax deductibility table on that web page is wrong. When both husband and wife are not covered by employer 401k, there is no deductibility limit: <a href="http://www.investopedia.com/articles/retirement/03/011603.asp">Another IRA tax deductibility page</a> If you look closely at the web page you mentioned, you will discover what the error is.
Deductibility of IRA is phased out between $159,000 and $169,000 for 2008
</blockquote>I think that's if you have 401k at work. I do not.</blockquote>
No, that is not if you have a 401k at work. Those figures are correct, to a degree, for someone without an employee sponsored plan such as yourself. The numbers are much lower if you have a 401k at work... Is your spouse covered by an employee sponsored plan?</blockquote>
Hmm... I did some research before I made my contribution. Did not see anything about IRA limit being phased out without 401k. Also, my accountant who's pretty experienced did not bring that to my attention. I just found this page, which is pretty updated: <a href="http://www.smartmoney.com/personal-finance/taxes/what-are-your-ira-options-9563/"><strong>IRA Calculation</strong></a>
It says I can contribute $5000 to my IRA for 2008.
Let me know if I missed something. My wife is a student and does not currently work.</blockquote>
Anyone can contribute to a traditional IRA up to the contribution limit. It does not matter what your income is... The question is whether or not that contribution is tax deductible.
<a href="http://www.moneybluebook.com/traditional-and-roth-ira-contribution-limits-and-income-phase-outs/">Section 4 here is the pertinent information.</a> If both you and your spouse are not covered under an employer sponsored plan and you filed jointly, it would appear that the deductibility of your $5K contribution would be completely phased out at an income of $169K. You might want to confirm this with your tax accountant. I'm an accountant but do not specialize in taxation.</blockquote>
Ok. I think I figured it out. The tax deductibility table on that web page is wrong. When both husband and wife are not covered by employer 401k, there is no deductibility limit: <a href="http://www.investopedia.com/articles/retirement/03/011603.asp">Another IRA tax deductibility page</a> If you look closely at the web page you mentioned, you will discover what the error is.