Coverdell IRA

T

Timshel

New member
Just did my taxes with TaxAct online. It's easy, cheap and hopefully pretty accurate (the reviews I read were good). I haven't had this much ease in doing my taxes in many years. I still don't have as complicated a return as I should, with my income, but...

Anyway, I was looking at this Coverdell IRA for the kids and maybe my nephew. The money grows without taxes and can be withdrawn without taxes. But that's not good enough. It does not give me any tax break. And why not? I am reducing the burden on other taxpayer benefits, maybe the kid does not have to go as deep into debt and less money goes to the war industry.

Write your Congress person. Tell them to improve it.

http://www.irs.gov/newsroom/article/0,,id=107636,00.html
 
You should get your tax break about the same time as that IRA actually helps reduce the burden on others. 15 years or so.

By saving that money instead of spending it you are actually slowing down the recovery ;)
 
uscitizen said:
You should get your tax break about the same time as that IRA actually helps reduce the burden on others. 15 years or so.

By saving that money instead of spending it you are actually slowing down the recovery ;)
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Huh, I thought we already taught you about that nonsense.
 
RStringfield said:
Just did my taxes with TaxAct online. It's easy, cheap and hopefully pretty accurate (the reviews I read were good). I haven't had this much ease in doing my taxes in many years. I still don't have as complicated a return as I should, with my income, but...

Anyway, I was looking at this Coverdell IRA for the kids and maybe my nephew. The money grows without taxes and can be withdrawn without taxes. But that's not good enough. It does not give me any tax break. And why not? I am reducing the burden on other taxpayer benefits, maybe the kid does not have to go as deep into debt and less money goes to the war industry.

Write your Congress person. Tell them to improve it.

http://www.irs.gov/newsroom/article/0,,id=107636,00.html
Click to expand...
turbotax.com

It's been awesome for us. It even remembers things like carryover deductions.
 
Oh wait, you put the wink in. Sorry bro.

For my stepson and nephew, it's going to be like 4-5 years before they will be headed to college. I just got started.

Shit, I'd put money into my niece, by marriage, or send me your rugrats names if it reduces my taxes. I am just looking for ways to buy less bombs, help those I love or do good for a complete stranger, over doing harm.
 
Damocles said:
turbotax.com

It's been awesome for us. It even remembers things like carryover deductions.
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TurboTax is good but way more expensive. TaxAct was only $10 and TurboTax is like what $100, and the reviews were pretty close to the same.

TaxACT remembers the last three years, not that I will need it for carryover, and I think it was up to 15 years for $6 more.

Maybe if you have a really tough tax return TurboTax is better, but then maybe you should see a real pro.

I have been doing my own taxes for years. And, as I said, it's been a loooooong time since they were that easy. It was well worth it for that alone, plus you get the efile and quick return.
 
RStringfield said:
TurboTax is good but way more expensive. TaxAct was only $10 and TurboTax is like what $100, and the reviews were pretty close to the same.

TaxACT remembers the last three years, not that I will need it for carryover, and I think it was up to 15 years for $6 more.

Maybe if you have a really tough tax return TurboTax is better, but then maybe you should see a real pro.

I have been doing my own taxes for years. And, as I said, it's been a loooooong time since they were that easy. It was well worth it for that alone, plus you get the efile and quick return.
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Nah, it's like $30, and it works as a backup, keeping your information accessible and, as I said, remembers things like carryover deductions that changing boats would make many forget.
 
Damocles said:
Nah, it's like $30, and it works as a backup, keeping your information accessible and, as I said, remembers things like carryover deductions that changing boats would make many forget.
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Yeah, I looked at it again. Cheaper than I thought but still not as cheap as TaxACT, even with the the 15 years of saved data.

Did yours show you where your money went? Still way too much to bombing brown people for me. Could have bought a new living room suite with a HDTV for that or paid my mom's rent for a year.

So what about that Coverdell IRA? I wrote my Rep. I want to send the kids through college because it is a good way to get the ones with half a brain off the dole, from Uncle Sam or Uncle Ron, forever.
 
Coverdell is an after tax product, like a Roth IRA. You don't get a benefit on the front end, you get it at the back end when you withdrawal without penalty on the gain.

It is a great idea if you plan on saving a specific amount to put some of it in one of those accounts.

We have separate accounts for the girls for college, some in different vehicles.
 
my wife buys the $45 turbo-tax each year cause it has state as well. The fed only is like $30.
She does it all and just ask me for my Ameritrade schedule, which was 3 pages long last year. 08 is a lot shorter
 
Topspin said:
my wife buys the $45 turbo-tax each year cause it has state as well. The fed only is like $30.
She does it all and just ask me for my Ameritrade schedule, which was 3 pages long last year. 08 is a lot shorter
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The online one has the State as well. It also backs up your data. We have a very long schedule for our *investment company deleted* accounts. Usually more than 9 pages, we also have to include separate schedules for foreign taxes paid and other annoying stuff.
 
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cool, my wife spending $45 annually is not bad becuase she takes it a lot more seriously than the average CPA would.
A buddy of mine got audited after having a CPA do his returns and got a huge bill.
 
Topspin said:
cool, my wife spending $45 annually is not bad becuase she takes it a lot more seriously than the average CPA would.
A buddy of mine got audited after having a CPA do his returns and got a huge bill.
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Yup. You can also purchase audit protection if you want and other stuff, but I do it right and usually don't buy that.
 
Damocles said:
Coverdell is an after tax product, like a Roth IRA. You don't get a benefit on the front end, you get it at the back end when you withdrawal without penalty on the gain.

It is a great idea if you plan on saving a specific amount to put some of it in one of those accounts.

We have separate accounts for the girls for college, some in different vehicles.
Click to expand...

Yeah, I know. That's what I am saying, I want a tax break on the front end. Seems like a good deal all around, if that were changed.
 
And it can be taxed if the kid does not use it for college by 30. It's basically theirs to do whatever they want with it too, though it can be taxed if not used for college.

When I was 20 something I was not making enough to really worry about extra income for taxes. I might have taken the dough and had big party.

With my stepson that's not a concern, he is college bound, for sure. But, with my nephew, he's more like me and could get into trouble with found money.

And that is another thing I'd like to see them change... return the money to the contributor if the kid does not go to college, and if it increased the contributor's taxable income, that would be okay. But, maybe that's too much trouble, as the irs would have to keep track of all that.

I do like that I can put money in for my nephew. They don't have to be my dependents. But, still, let's get a tax break.
 
talking about taxes... contributions to both of the links in my signature are tax deductible. Ron Paul 08 is not, so I hope to give to them this next year, if I feel the need to make a difference. :)
 
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