* There was a deduction for a $3,700 retirement plan Simple IRA on my client's W-2.
* Gross wages in box 1 was reduced by the amount of the same amount.
* My client is not sure if the funds were ever forward to the retirement plan and wants to make a contribution to his personal IRA.
Q1: Can my client make a $5,000 "deductible" IRA contribution? Seems like there is some double dipping 1) reduced gross wages 2) adjustment to income.
backround: I am using CS Ultra Tax and I've input the W-2 information. I set it so the program will calculate the allowed and disallowed IRA contribution. It allows a $5,000 contribution.
Q2: If the funds were not forwarded to the retirement plan, what needs to be done? Do we need to amend the payroll returns?
background: this is a family operated C-Corp - no lawsuits please.
As always, thank you in advance for your insight.
* Gross wages in box 1 was reduced by the amount of the same amount.
* My client is not sure if the funds were ever forward to the retirement plan and wants to make a contribution to his personal IRA.
Q1: Can my client make a $5,000 "deductible" IRA contribution? Seems like there is some double dipping 1) reduced gross wages 2) adjustment to income.
backround: I am using CS Ultra Tax and I've input the W-2 information. I set it so the program will calculate the allowed and disallowed IRA contribution. It allows a $5,000 contribution.
Q2: If the funds were not forwarded to the retirement plan, what needs to be done? Do we need to amend the payroll returns?
background: this is a family operated C-Corp - no lawsuits please.
As always, thank you in advance for your insight.