If you haven't already, you only have between now and April 15th to make your 2004 IRA contribution. If you are eligible for an IRA, especially a Roth IRA, it is one of the smartest things that you can do.

If you are 50 or over by December 31, you can contribute $3,500. If not you can contribute $3,000. You should consult with your CPA or tax advisor about your eligibility and to choose between a Roth or Traditional, but remember, the contribution must be made by April 15.

If you have children who will someday (hopefully) be attending college you should also consider a 529 plan. Again, consult with your CPA or tax advisor.

 

Holiday bonus money???!!!??? What's that? Do companys still do that sort of thing?

 

Rob, my company takes the contribution out of the bonus pre tax before they give it to us. Most folks here hate that and think bonuses should be exempt but I think it's a good way to make sure a contribution is made. Do you think we should be given a choice when it comes to bonuses? I told them I'd ask my foremost expert accountant's opinion.

 

I suppose some people want the choice, and I suppose some people would rather have the money up front, but it is hard for me to understand why anyone would object to a pretax contribution to a pension fund.

 

In addition to Rob's wonderful suggestions, I'll throw into this a reminder to people to make their charitable donations before the end of the year.

Happy holidays, and do good things with your moola, folks!

 

That is an excellent suggestion. Donations are always good, but if you want to get the tax benefit for the year 2004 your donation must be made by the end of the year.

You also have only one day left to do something about your portfolio and get the benefit in 2004. If you are going to make a move, tomorrow is the last day. Again, call your CPA or tax advisor for more information and advice.

 

Now that I'm self-employed as a sole proprietor, I'm contributing to a SEP at Vanguard Anyone who has a sideline business (could be like Rick Hesel, except maybe you must turn a profit....) can apparently set one up....even if you have another regular job with 401-K, etc.

My employer (me, in this case) can contribute 20% of any 'net income' amount up to $200K (hmmm....not worrying about that upper limit ), which therefore reduces my taxable income by that amount.

 

I'm self-employed (Inc.), and my accountant said not to pay into my IRA this year, but instead to open an indie 401K. This is for individuals who have a sole proprietorship or Incorporation with one member.

The benefit to the Individual 401K is that the maximum deduction is quite large. For example, an individual over 50 with a $50k salary may contribute $28,500 if incorporated, and $26k if not. The "employee" contributes a portion to the 401K, and the "company" matches funds.

I don't pretend to know all of the ins and outs of this plan, but I opened one (very quickly) at www.pioneerfunds.com. It may be worth a look.

**PS Please also take this advice for what it cost you

 

Cordy,

Your accountant is correct. If you are in a position to take advantage of a 401k, that is a very good thing to do.

In any event, all of you should seek the advice of your accountant, CPA or tax advisor to figure out which path is best suited to you. In the long run, proper advice is well worth the cost.

The important thing is that you do something in the way of an IRA/401K, and all of the other tax related actions. Today is December 30. The year ends tomorrow night.

 

What was your hourly consulting fee again for Vintage members, Rob? And don't say "nothing" because you've got to get paid too.