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It is possible to make a contribution for 2013 and 2014, but you would not make your 2014 contribution until that time. You could not deduct the 2014 contribution from your 2013 tax.
Therefore I could only deduct the 2013 amount ($6500) for a traditional IRA but I could do a Roth in 2014?
No, in 2014 you could still do a pretax contribution, the deduction would just come off your 2014 income
and the amount is only $6,500 if you are over 50
For everyone else it's $5,500
Oh, but I would not get any additional income in 2014. I am getting a single lump sum this week for the whole period of the contract. Yes, I am over 60 years old
Okay. If you do not have earned income in 2014, then you would not be able to make an IRA contribution
Yikes. That's what I thought. Oh well
The contribution limit is the smaller of your taxable compensation or $6,500 - and if your taxable compensation is 0, then that's what you could deduct
Thank you. I just needed taht confirmation unless there was an option I wasn't aware of.
It's hard when you have a lump sum!
Could you ask them to pay you half in December and the other half in January?
That was my mistake. Didn't consider the consequences. Yes, I am going to try for two payments. Thank you for your help.
You're welcome. If there's nothing else I can assist you with, please rate my response as "excellent" so that I may receive credit for assisting you today
I will. Bye.
Have a great day!