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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29581
Experience:  Taxes, Immigration, Labor Relations
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I just took a retirement package from a major corporation. I

Resolved Question:

I just took a retirement package from a major corporation.
I paid almost $93K in Federal taxes and $33K in California taxes.
Do you know of any safe investments, such as oil drilling, etc., where I could get some of that money back in this year's tax return?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome to Just Answer!
As you are looking for save investments - the only guaranteed income is from bank CDs, however the interest rate offered today is relatively low and would not cover even inflation.
If you already received proceeds - it is too late to defer payment.
Your only option is defer tax liability - to make a contribution into IRA account. If you qualify - you may defer tax liability by contributing up to $5000 ($6000 if you are 50+).
If you want to defer tax liability on future earnings - you may contribute to Roth IRA account - in this case your earnings potentially will never be taxable;
or non-qualified annuity - which you need to consult with a local tax advisor.


Let me know if you need any clarification.

Customer:

I am married, so my wife could also open an IRA and contribute for $6,000, as we are both over 50 years?

Customer:

Regardless if she made any money this year?

LEV :

The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2011. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $6,000. The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income - see here:


LEV :

If you have enough earned income, you may also make an IRA contribution for a non-working spouse.

Customer:

Thanks for your help, Lev.

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