I think I made an Traditional IRA mistake- Can it be fixed?

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celia
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by celia » Mon Jun 04, 2018 3:33 pm

Hairfarm wrote:
Mon Jun 04, 2018 2:32 pm
Thanks for the advice. Anything else I need to be aware of before sending this in myself?
Not completely right.

Copy all the numbers from the front of your return onto a new Form 1040. Then put the deduction on line 32 and update the values on lines 36 and 37.

Then you have to update all the math calculations on the back, if you want a bigger refund (or smaller amount owed). In other words you are manually doing the whole return without needing to update any attached forms. The IRS will likely update this info for you, but it would be good for you to understand this process for future times you need to amend.

Then, and only then, fill out Form 1040X which compares what you originally sent in with what should have been sent in.

retiredjg
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by retiredjg » Mon Jun 04, 2018 3:53 pm

That does seem like a good idea. And the instructions for the 1040x make a similar suggestion. It seems to be a tip rather than a requirement.
  • Many find the easiest way to figure the entries for Form TIP 1040X is to first make the changes in the margin of the return you are amending.

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Epsilon Delta
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by Epsilon Delta » Tue Jun 05, 2018 1:07 pm

retiredjg wrote:
Mon Jun 04, 2018 2:02 pm
The original adjusted gross income should be the last line on your original Form 1040.
AGI is the last line on the front of 1040 (and the first line on the back). There's plenty of other stuff after AGI on page 2.

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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by retiredjg » Tue Jun 05, 2018 3:57 pm

Epsilon Delta wrote:
Tue Jun 05, 2018 1:07 pm
retiredjg wrote:
Mon Jun 04, 2018 2:02 pm
The original adjusted gross income should be the last line on your original Form 1040.
AGI is the last line on the front of 1040 (and the first line on the back). There's plenty of other stuff after AGI on page 2.
Thanks ED. That is what I meant to say. Guess I was just going to fast. :D

I'll fix it.

Hairfarm
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by Hairfarm » Thu Jun 07, 2018 3:40 pm

Thanks for the last minute advice. I'll be amending this weekend.

Btw, what's the best way to know what the "amended" refund will be?

thanks!

retiredjg
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by retiredjg » Thu Jun 07, 2018 4:41 pm

Do what Celia and the IRS suggested and work through the old Form 1040 in pencil in the margins.

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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by LadyGeek » Thu Jun 07, 2018 6:44 pm

This thread is now in the Personal Finance (Not Investing) forum (IRA help).
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

Hairfarm
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by Hairfarm » Fri Jun 15, 2018 11:29 am

If I take the money from my amended return refund (late tIRA deduction) and reinvest it into the same tIRA will that reinvestment be tax deductible again? Am I thinking about this wrong?

thanks

kaneohe
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by kaneohe » Fri Jun 15, 2018 11:51 am

Hairfarm wrote:
Fri Jun 15, 2018 11:29 am
If I take the money from my amended return refund (late tIRA deduction) and reinvest it into the same tIRA will that reinvestment be tax deductible again? Am I thinking about this wrong?

thanks
Perhaps it might help not to think about "where" the money came from.......in the OP, you were thinking of the money has coming from your already taxed paycheck. Now you are thinking of it as coming from your already deducted TIRA. It's just money in the bank like your paycheck was.........you can deduct the TIRA contribution if you meet the conditions of having (or not) a retirement plan and if your MAGI is low enough for your filing status.

Hairfarm
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by Hairfarm » Fri Jun 15, 2018 12:50 pm

kaneohe wrote:
Fri Jun 15, 2018 11:51 am
Perhaps it might help not to think about "where" the money came from.......in the OP, you were thinking of the money has coming from your already taxed paycheck. Now you are thinking of it as coming from your already deducted TIRA. It's just money in the bank like your paycheck was.........you can deduct the TIRA contribution if you meet the conditions of having (or not) a retirement plan and if your MAGI is low enough for your filing status.
Thanks. That does help to think of it that way.

retiredjg
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Re: I think I made an Traditional IRA mistake- Can it be fixed?

Post by retiredjg » Sat Jun 16, 2018 8:06 am

Agreed. Where money comes from is something you should try to forget completely.

Remember that the traditional IRA is a magic box in your case because you get to deduct the contribution. When you put money in it, you get to reduce your taxable income by that amount.

When you take money out, you pay taxes then. The whole point is that many people are paying tax at a lower rate when the money comes out.

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