Retirement Savings Contributions Credit

[pagerdaddy]

On line 50 of form 1040 (line 32 of 1040A) there is a credit for people who have contributed to IRA's, 401K's, etc.

Does anyone know if you can take this credit if your 401K deductions were "pre-tax"? I was always under the impression that you couldn't take a deduction for savings that weren't taxed to begin with.

I called the IRS helpline, and the ladies I talked to just asked me some questions they read from a script, and told me I qualified for the credit based on what I told them. I haven't seen anything in the instructions that addresses the "pre-tax" issue for this credit.

Any thoughts on this?

[HavockWK]

Originally Posted by pagerdaddy

On line 50 of form 1040 (line 32 of 1040A) there is a credit for people who have contributed to IRA's, 401K's, etc.

Does anyone know if you can take this credit if your 401K deductions were "pre-tax"? I was always under the impression that you couldn't take a deduction for savings that weren't taxed to begin with.

I called the IRS helpline, and the ladies I talked to just asked me some questions they read from a script, and told me I qualified for the credit based on what I told them. I haven't seen anything in the instructions that addresses the "pre-tax" issue for this credit.

Any thoughts on this?

I'm no tax expert, but I would say that this is only applicable for taxed contributions to either the IRA or 401k. Everything that goes in pretax is already figured out of your income tax, so if you took a credit for that, you would be double dipping. You think the IRS is going to let you get away with that?

[CaliforniaTitan]

Originally Posted by pagerdaddy

On line 50 of form 1040 (line 32 of 1040A) there is a credit for people who have contributed to IRA's, 401K's, etc.

Does anyone know if you can take this credit if your 401K deductions were "pre-tax"? I was always under the impression that you couldn't take a deduction for savings that weren't taxed to begin with.

I called the IRS helpline, and the ladies I talked to just asked me some questions they read from a script, and told me I qualified for the credit based on what I told them. I haven't seen anything in the instructions that addresses the "pre-tax" issue for this credit.

Any thoughts on this?

No, you cannot take this credit. Don't let the lil IRS lady trap you into that one. You were/are correct in your thought regarding anything that is 'pre-tax' deductions.

Chris

[TallTexan]

This was great! Maybe the Mods will reccomend a section to take advantage of all the great minds we have on TT. Maybe a " HELP YOUR BROTHER TITAN OWNER" section. Lawyers, engineers, doctors, Stereo shop owners, accountants, and many others. I seen when a post said that he was a Nissan mechanic and would be glad to answer qyuestions and he was flooded with questions. I did not see any answers though. Maybe a nice addition to TT.

[pagerdaddy]

Originally Posted by CaliforniaTitan

No, you cannot take this credit. Don't let the lil IRS lady trap you into that one. You were/are correct in your thought regarding anything that is 'pre-tax' deductions.
Chris

Thanks, Guys.
After what those two had told me, I was even thinking about filing a 1040X to pick up the credit for 03. I became a little suspicious of their expertise when they avoided my "pre-tax" questions. It seems like the IRS has a different person trained for each "line" on the forms.

So I take it you don't do anything with the "elective deferrals" shown in box 12 of your W2? Sounds like it's just info you can't really do anything with. It would certainly be less confusing if they had put something in the instructions about "pre-tax" contributions, or did I miss something?

I usually try to compare what I am claiming now with what I did in the previous year(s). I noticed that I was putting down a $2,000 child tax credit for 04, but had only put down $1200 for 03. I had completely forgot about the check for $800 that I received in advance for the credit (03).

I know a lot of people would rather pay someone to do their taxes, but I've always gotten some kind of masochistic pleasure out of doing it myself.

TallTexan is right when he's says there are a lot of very knowledgeable people on the board. I think the Off-Topic area serves many of us very well when you want to talk about anything not related to the truck. Some of the lawyers and other professionals have to be a little careful with specifics, due to malpractice and state licenses, but you'll always get some good advice in this section.

Maybe not always what you wanted to hear, but certainly worth more than you paid for it!