Savers' credit

[NotSoFair]

Message deleted by NotSoFair.

I found the answer myself. Thanks

[mwcpa]

Nosofar... even though you found your own answer I felt it appropriate to give others who may need help some direction, lots of people are afraid to ask questions, this is mainly a help site, so your question may be helpful to others...

therefore, if any one else has a question about this credit some great data can be found at the IRS website...

www.irs.gov/taxtopics/tc610.html

also see IRS form 8880 (http://www.irs.gov/pub/irs-pdf/f8880.pdf)

"You may be eligible for a tax credit if you make eligible contributions to an employer-sponsored retirement plan or to an individual retirement arrangement" (from IRS.gov)

[NotSoFair]

I agree.

My question was, if contributions to Roth IRA is eligible for claiming saver's credit. I found the answer is 'Yes'.

Thanks

[NotSoFair]

I've a related question. I plan on contributing to spouse's IRA for year 2011, but I can do that only after we file taxes, because he doesn't have the ITIN yet. So, do I have to file an amended return after the contribution is made in order to claim the credit or can I claim it in anticipation? (I am thinking I have to file amended return).

Thanks

[mwcpa]

An IRA (Roth and regular) to count as being for 2011 MUST be funded on or before 4-17-12

From IRS publication 590
"Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means that contributions for 2011 must be made by April 17, 2012, and contributions for 2012 must be made by April 15, 2013."

[NotSoFair]

Jan 7, 2012 22:45:59 GMT -5 mwcpa said:

An IRA (Roth and regular) to count as being for 2011 MUST be funded on or before 4-17-12

I understand that part. My question was supposing I fund the ROTH before the due date (but after the returns are filed), can I file the tax return and claim the savers credit say in Feb although the ROTH is not funded at that time?

[mwcpa]

"supposing I fund the ROTH before the due date (but after the returns are filed), can I file the tax return and claim the savers credit say in Feb although the ROTH is not funded at that time?"

Yes you can, but if you fail to fund the Roth by 4-17-12 then you MUST amend the filing (if you claimed the credit) and repay the benefits claimed (you will be charged interest).

[mwcpa]

"You'll be charged penalties too possibly"

toughtimes, surprisingly I have seen the IRS be a little lenient on penalties if the amendment is filed quickly.... I had a client last year who went to a "guaranteed refund" firm.... they prepared a fake schedule C.... claimed that the client tithed.... they were young and did not know any better.... but they got frightened after they signed and had the e-file processed..... we prepared an amended filing that was submitted before 4-15..... even though the "F" word clearly could have applied (over 25% misstatement.... and the "F" word stands for fraud) only "interest" was charged from the time the original refund was given until payment was made back....

[NotSoFair]

Jan 8, 2012 13:02:18 GMT -5 mwcpa said:

Yes you can, but if you fail to fund the Roth by 4-17-12 then you MUST amend the filing (if you claimed the credit) and repay the benefits claimed (you will be charged interest).

Thank you for the response.

I want to contribute before 4-17-12, but that is also depending on when we receive his ITIN. Without an ITIN, I don't think we can even open an IRA. I plan on filing my tax returns in the first week of Feb and hope he will get the ITIN before 4/17. What is our alternative if he doesn't?

[mwcpa]

"What is our alternative if he doesn't? "

File without claiming the credit.... then amend if you fund his IRA before 4-17-12

[saveinla]

Jan 7, 2012 17:43:25 GMT -5 NotSoFair said:

I've a related question. I plan on contributing to spouse's IRA for year 2011, but I can do that only after we file taxes, because he doesn't have the ITIN yet. So, do I have to file an amended return after the contribution is made in order to claim the credit or can I claim it in anticipation? (I am thinking I have to file amended return).

Thanks

Don't you need the ITIN to file taxes for your spouse?

[mwcpa]

"Don't you need the ITIN to file taxes for your spouse?"

Yes and no..... you need to "paper" file.... and then ask for the ITIN..... (or already have asked for it)

[NotSoFair]

Jan 8, 2012 20:48:04 GMT -5 mwcpa said:

Yes and no..... you need to "paper" file.... and then ask for the ITIN..... (or already have asked for it)

Does this imply we can request ITIN independently?

[mwcpa]

see www.irs.gov/businesses/small/international/article/0,,id=96696,00.html

"ITIN
An ITIN, or Individual Taxpayer Identification Number, is a tax processing number only available for certain nonresident and resident aliens, their spouses, and dependents who cannot get a Social Security Number (SSN). It is a 9-digit number, beginning with the number "9", formatted like an SSN (NNN-NN-NNNN).

To obtain an ITIN, you must complete IRS Form W-7, IRS Application for Individual Taxpayer Identification Number (PDF) . The Form W-7 requires documentation substantiating foreign/alien status and true identity for each individual. You may either mail the documentation, along with the Form W-7, to the address shown in the Form W-7 Instructions, present it at IRS walk-in offices, or process your application through an Acceptance Agent authorized by the IRS. Form W-7(SP), Solicitud de Número de Identificación Personal del Contribuyente del Servicio de Impuestos Internos (PDF) is available for use by Spanish speakers.

Acceptance Agents are entities (colleges, financial institutions, accounting firms, etc.) who are authorized by the IRS to assist applicants in obtaining ITINs. They review the applicant's documentation and forward the completed Form W-7 to IRS for processing.

NOTE: You cannot claim the earned income credit using an ITIN.

Foreign persons who are individuals should apply for a social security number (SSN, if permitted) on Form SS-5 with the Social Security Administration, or should apply for an Individual Taxpayer Identification Number (ITIN) on Form W-7. Effective immediately, each ITIN applicant must now:

Apply using the revised Form W-7, Application for IRS Individual Taxpayer Identification Number; and
Attach a federal income tax return to the Form W-7.
Applicants who meet an exception to the requirement to file a tax return (see the instructions for Form W-7) must provide documentation to support the exception.

New W-7/ITIN rules were issued on December 17, 2003. For a summary of those rules, please see the new Form W-7 and its instructions."