To 18:24-
How is the rate of return influenced by the dollar amount invested? If the OP puts the $1300 into a mutual fund or stock his or her rate of return would be the same as if he or she bought $1 million worth of that same fund or stock. I would put the $1300 into a traditional IRA if OP were eligible. OP, you said you contributed to a Roth IRA last year. Was that for tax year 2011? If so then depending on your income and whether or not you are eligible to or participate in a work retirement plan you may still be eligible to contribute up to $5,000 ($6,000 if 50 or older) into a traditional IRA. Why give Uncle Sam your money when you can save it for retirement?

Anonymous wrote:Wouldn't you have had to do this before Dec. 31, not before April 15?

No

Anonymous wrote:If you are eligible, I would do this. Why give the government $300 if you can keep it? Your friend sounds smart. It's no big deal to have multiple IRAs. Just be sure you are actually eligible, as pp says.

Yes, it is. You probably won't get a very good rate of return on such a small account. You will eventually have to pay tax on this silly thousand dollars or so, and you might be in a higher tax bracket at the time. Unless you plan on loading that IRA until there's enough money in it to do some decent investing, just pay the $300 and call it a day. Then adjust your withholding for next year.

It's only $300.

Wouldn't you have had to do this before Dec. 31, not before April 15?

Thank you!!

Anonymous wrote:To 16:43 this is OP. Yes, I put the max into my Roth last year $5,000. So i cant do the traditional anyway?

Nope, it's $5k max combined.

Anonymous wrote:Depends on your AGI.

http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

If she's eligible to contribute to a Roth, I doubt very much that this is an issue for her. The only issue is whether she maxed out the Roth, and it sounds like she did. So that ship has probably sailed. UNLESS, OP, are we talking about a SEP-IRA? Is this self-employment income?

Depends on your AGI.

http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

"For 2012, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:
$5,000 ($6,000 if you’re age 50 or older), or
your taxable compensation for the year."


http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits

To 16:43 this is OP. Yes, I put the max into my Roth last year $5,000. So i cant do the traditional anyway?

If you are eligible, I would do this. Why give the government $300 if you can keep it? Your friend sounds smart. It's no big deal to have multiple IRAs. Just be sure you are actually eligible, as pp says.

did you put the max into a roth IRA? if so you can't also do a traditional IRA. if you haven't maxed out the roth you can get a tax benefit from putting money into a trad IRA though the amount will depend on your tax rate.

I wish I only owed $300. HA

I don't get your logic.

You almost broke even, that is great. I'd pay the $300 and be done.

I owe almost $300 in taxes ( fed and md state combined)

The friend doing my taxes has suggested that i put $1300 from my savings into a traditional IRA before Apr 15th and that will even out my tax bill, give or take a few dollars.
I already have a roth IRA and this doesnt make any sense to me, To have another IRA.

Any advice either way?