INSIDE FINANCE:
'Tis the Season --- The Tax Season


By Robert M. Jaffe, MBA, AAMS
April 15, 2005

Ben Franklin said it. "There are two things certain in life; death and taxes." In less than two weeks, at this writing, we all must face the latter, much preferable to the former. Midnight, April 15 is the witching hour, and being the well-organized readers that you are, surely you've already dealt with accountants, or perhaps TurboTax or waded through the exercise on your own and sped those odious forms to the IRS and Trenton. If not, there's no time to waste.

To paraphrase a "Yogiism", this issue's column is a bit of "déjà vu, all over again", but If you didn't heed my suggestions in my column of February 10, here's a final reminder. There are two things you can and should do if at all possible. You have until April 15 to contribute to your IRA for 2004 - $3,000 plus an additional "catch-up" of $500 if you're 50 or older. If you were conscientious enough to have already contributed at the beginning of last year then don't wait any longer to contribute for 2005. The contribution level has been increased to $4,000 with the same catch-up provision by virtue of those silver strands among the gold, brown, black or red. There are certain restrictions based upon your adjusted gross income that limit the amount you may deduct for a traditional IRA as well as your ability to contribute to a Roth IRA. Discuss with your CPA for professional advice.

Speaking of IRAs, President Bush's "sales pitch" now includes proposed new incentives for charitable giving, including a tax break for older Americans who donate money to charity from their individual retirement accounts. The so-called IRA-rollover provision in Mr. Bush's budget plan would allow people to transfer money from IRAs to charity without penalty. No tax, get it? The provision applies to us fortunate folks over the age of 65.

Currently, if you were to donate IRA funds to charity you would first have to take the distribution withdrawal as income, and then claim the charitable deduction and you might not be able to deduct the full amount of your charitable contribution. At any rate, if you are considering making a charitable gift from your IRA in the future, this proposed change would be a real benefit.

But right now, at the very least, write that check for your 2004 IRA contribution.

Please Email bob@cfsias.com with your questions.

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INSIDE FINANCE will appear regularly, addressing financial matters of interest to our readers. Any questions? Email bob@cfsias.com

Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member NASD/SIPC. Cambridge and CFS are not affiliated.

The preceding article is for informational purposes only and should not be used as the primary basis for an investment decision. Indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results. All examples given are hypothetical and do not reflect actual investments. The views expressed in this article are those of the author and are not necessarily those of Cambridge. Bob Jaffe is Managing Director of CFS Investment Advisory Services, LLC in Totowa and has been a Clifton resident since 1984. Active in community affairs, Bob is Past Board Chairman of the North Jersey Regional Chamber of Commerce and a member of its foundation board. He serves as a commissioner on the Clifton Rent Leveling Board and the Committee for Individuals with Disabilities. He is Vice President of the Clifton Rotary Club. Representatives of Cambridge do not offer tax or legal advice. Consult a professional for your personal situation.