I owe on 2006 yr taxes, do I still have time to put into IRA?

Question

2006 I had income of 93K, married, 2 kids in school, one out (USMC). I will still owe 4K to state and federal. Can I, and how much will I need to offset this? Any other options?

Answer 1

Yes. You have until tax day (April 16, this year (the 15th falls on Sunday)).

You can contribute the maximum of $4,000 (if under 50).

Get going. You have one week!

EDIT: Even if your wife didn't worked, you can contribute another $4,000 in her name too.

Answer 2

The deadline for IRA contributions is the day you file your taxes. The deadline to file is April 17 this year. April 15 is a Sunday and April 16 is a DC holiday. Assuming you and your wife BOTH contribute $4000, your taxable income is reduced by $8000. Your actual tax will be reduced by NO MORE than $2240 (28% of $8000). If you are in a higher tax bracket, you are not eligible for an IRA deduction.

Answer 3

It depends on whether you have a retirement plan at work or not and same for your wife. Assuming you don't, you can each put in $4K by 4/17. Based on your gross income, for each $1000 in an IRA, you'll save $150 in tax. Ergo, $8000 in saves about $1200 in tax. If you are looking for the least expensive way to get out of coming up with $$ on 4/17, sorry to say, but it's to just pay the tax.

--A Damn Fine Tax Advisor

Answer 4

If you are eligible to contribute to a deductible IRA, you have until 4/17, the tax due date this year, to do it. There's a worksheet on page 32 of the instructions for form 1040 to figure how much you can deduct. At best, the deduction is dollar for dollar.

Answer 5

Too late.