Using 2002 tax return for 2002 Roth IRA--Legal?

[Guest jumbonav]

I just need a tax clarification. Does anyone know if I can file my 2002 income taxes claiming that I made a $3000 contribution to my 2002 Roth IRA, then use the tax return money to contribute to the IRA before 15 April? Thanks!

[txdd]

You do not report Roth IRA contributions on your tax return.

[Guest jumbonav]

Thanks for the info. I thought there was a block on the Form 1040 that asked if you had contributed to an IRA and how much for that year. I guess that's for a traditional IRA since that money is then deducted from your income for that year...

Thanks again.

[Appleby]

If it had been a traditional IRA, you could file your return- stating that you made the contirbution... and then make the contribution afterwards...providing the contirbution is made by April 15

[Guest jumbonav]

so, ergo, I can do the same thing with my Roth (use my tax return $$ to contribute for 2002 correct? Thanks in advance.

[Appleby]

Absolutely,

The origin of the funds is not a concern of the IRS.

Just make sure you contribute no more than your earned income or the contribution limit ( whichever is less)

[John G]

While you are at it, you might want to consider making the contribution for 2003. Early contributions means that your Roth funds are sheltered longer. At year end you just double check to make sure that you meet the various income and filing qualifications.

[Guest joehb]

Then the ROTH 2002 contribution can be made ANYTIME in 2003 or by 4-15-2003?

Not starting a new one, but adding the yearly contribution.

Thanks...........

[John G]

2002 contributions can be made up to the tax return due date in 2003 (April 15 unless that falls on a weekend or holiday each year... my birthday doesn't count for the later) not counting any extensions to file. You can open a new IRA up to that time, or add to an existing one.

2003 contributions - anytime up to the due date for your tax return in April 2004.

Note that there are 3.5 months over overlap in every year. It is important for the taxpayer to clarify for what year contributions have been made. Start by writing it on the check, deposit form (if any) or letter of instructions. Then... follow up on your next months statement to be sure the custodian did it correctly.

Custodians make mistakes, it pays to catch them sooner rather than later.

[Guest dickotter]

Just a hypothetical question:

If you don't need to report Roth IRA contributions on your 1040, how does the IRS know if you're conforming to the income limitations?

In other words, what's stopping someone with modified adjusted gross income >$110K (single) or >$160K (married) from opening a Roth IRA?

Thanks. (BTW, this is truly hypothetical; my AGI isn't close to the limits)

[Appleby]

Your Form 5498 ( used to report your IRA contribution) will be under the same SS# that you file your 1040.- Very easy for the IRS to cross reference.

[Guest carrida]

Does my Roth administrator send form 5498 to the IRS, or do I actually do this?

Thanks...

-D

[Appleby]

Your IRS custodian/trustee reports form 5498 information to you and to the IRS.

You ( as an individual taxpayer) never file form 5498 with the IRS