@SteamTrain wrote:
@VolvoGirl
Complications, always:
We are going to have to start being careful about indicating to folks that IRA contributions cannot come out of a person's paychecks, since so-called "Auto IRA" payroll deductions, have apparently started up in three states (OR, IL, CA) and perhaps more to come in the future. Certainly, they would likely be "After-tax" contributions, and I have no idea how they would show up on a W-2....perhaps in box 14, or not at all, but in a separate statement so that the person could enter those values separately as an IRA contribution in the tax return.
Even without an "automatic IRA", most employers who offer direct deposit will allow employees to split their paycheck between 2 bank accounts. In the "old days" the second account could be a savings account. But there's no reason the second account couldn't be an IRA that the person sets up at a bank or broker, as long as it has an ACH-compatible account and routing number. This would of course be after tax.
But it's always going to be important to clarify with taxpayers the difference between qualified workplace plans and individual (private, after-tax) accounts.
