Instead of re-investing the dividends in the stock I have, I requested and got them to pay me the dividends to supplement my income. I took early retirement and worked part-time in 2006. I did not put any money into IRA for 2006. In my parttime job, I had put ~$4K into a 401K account. My total AGI for 2006 is ~$67K. My preliminary tax return showed that I have to pay taxes for the dividends that I did not pay taxes in 2006. I have to pay a penalty also. In order for me to reduce taxes, can I still put money into IRA for 2006? What is the maximum amount for 55 year old and above? Are there other things I can do to reduce the taxes and hence the penalty I have to pay Uncle Sam?
Orignal From: How can I reduce the tax I have to pay for the dividends I received in 2006 from stocks?Catch up on IRA?
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