Pen Truth Contributor
In anticipation of the economic crisis and the possibility of losing my job, I closed one of my IRAs that I had opened only 5 months earlier. I used the money to pay off my credit cards because the company I work is having real trouble keeping the doors open. This decision cost me almost half of the total amount in taxes. I already paid taxes on this money when I earned it.
Due to the work slowdown I already earned less in 08 than I did in 07. By January my other IRA lost 75% of its value, but I will never get to deduct that from my taxes. That account had not fully recovered from the 2001 stock market meltdown.
This is not a fair structure if you are not in the millionare’s club. If you owe over 36 thousand you can get away with paying as little as 4 thousand by negotiating with the IRS. Who thought up this little cluster of luck?