Retirement Savings and Benefits
Questions and comments about IRAs, 401k accounts, social security, and other forms of retirement savings and benefits.
TIRA contributions in retirement
Posted by: BruceM, September 15, 2017 03:51PM
Hello

I spoke to a retired 62 year old teacher who did some substitute work for 2016, for which she received a single check from the School District for $1,800. She's single and had no other earned income for the year. Due to a natural disaster, she elected to endorse the check over to the American Red Cross. She had two questions for me:

1. "Can I contribute this amount to my TIRA for the year and deduct it on my Federal tax return if I never actually took the money into my household"?

Answer: Yes. The IRS does not trace earned dollars, but only requires the IRA owner...or spouse...has at least the amount of the contribution in earned income.

2. "Can I deduct the $1,800 as a charitable contribution and deduct my TIRA contribution"?

Answer: I think so. Because the IRS does not trace earned dollars and because one does not have to have earned income to make a charitable contribution.

Do you agree?

BruceM

Re: TIRA contributions in retirement
Posted by: Alan S., September 15, 2017 05:29PM
Yes, agree.

Re: TIRA contributions in retirement
Posted by: triad, September 15, 2017 05:47PM
The phrase the IRS folks use is "fungible."

Re: TIRA contributions in retirement
Posted by: BruceM, September 15, 2017 09:02PM
Alan and triad
Thanks. Never heard of 'fungible' in an IRS context...guess I'll have to add that to my tax vocabulary :-)

BruceM



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