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Pleasant tax-time surprise

April 21st, 2007 at 03:45 pm

The good news was that my husband made an extra $15k in recruiting bonuses this year (it's quite common in our industry for the company to pay you a bonus if you convince your friends to take a job that open.) The bad news was that this extra income plus our stock profits and dividends pushed our income into the range where you can't contribute the full $4k to a ROTH. The good news is that we decided to put $2200 each into our ROTHs and the remaining $1800 each into our traditional IRAs. What I hadn't realized was that a spousal IRA is deductible -- the contribution lowered our tax bill from $2200 to $1600! Perhaps I should've put the full $4k into the traditional IRA to really reduce the bill, but on the other hand I want to contribute as much to the ROTH as possible now because we won't be eligible when I start working again in a couple of years.

Posted in Financial Housekeeping | 2 Comments »

2 Responses to “Pleasant tax-time surprise”

  1. monkeymama Says:
    April 21st, 2007 at 05:16 pm 1177175799
    1177175799

    Cool! I think you did okay. As long as you were able to fully fund IRAs. Take advantage.

  2. homebody Says:
    April 21st, 2007 at 07:42 pm 1177184544
    1177184544

    Yes good figuring on your part. DH and I are at the age and income that it's hard to know what is more advantageous, the traditional or Roth, so we try to split, some into each to hedge our bets!

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