Ira Contribution

[Moemg]

Will my Ira contribution be deductible if I worked one month last year and I have a taxable pension ?

[ziggy29]

Assuming your MAGI is low enough to qualify for a deductible IRA, yes, it should be deductible to the extent of your earned income (or the contribution limit, whichever is lower). The pension has nothing to do with it other than being added into your MAGI for these purposes.

[youbet]

I started a similar thread and got some good information here: http://www.early-retirement.org/foru...+deductibility

[Martha]

Right, you have to have earned income from work. I assume that the work did not have any kind of retirement plan for you to contribute to.

[Moemg]

Quote:

Originally Posted by Martha Right, you have to have earned income from work. I assume that the work did not have any kind of retirement plan for you to contribute to.

It was just a perdiem job that I did for the month of Jan. .So far it looks like I can contribute the entire amount I made to an IRA which is good as I made some tax mistakes this year . It was my first full year retired and I was not sure how much to pay in estimated taxes and I did not pay enough .

[OAG]

As long as your estimated taxes add up to your tax liability for last year (this one may not work). Or, alternatively, as long as the amount owed is less than $1,000 there is no penalty.

[kaneohe]

Quote:

Originally Posted by OAG As long as your estimated taxes add up to your tax liability for last year (this one may not work). Or, alternatively, as long as the amount owed is less than $1,000 there is no penalty.

I don't think the last sentence is quite correct....IRS treats withholding better than paying estimated taxes. Last sentence would be true if tax owed less withholding (and some credits) was less than $1,000. Not true if tax owed less estimated taxes < $1K though penalties/interest may not be too bad at
that level.

see Exceptions to penalty on 1st pg of this:
http://www.irs.gov/pub/irs-pdf/i2210.pdf