I need tax help....

oops Accountant, i mean

Awhile back I was laid off my job (Planet Hollywood I worked at closed) and I had a 401k plan. Since I am a big procrastinator, I didn't roll it over right away into a new IRA. Eventually Merrill Lynch sent me a check for the money, minus the $649 for taxes. I then looked into getting a IRA from my local bank and he said that if put in $649 of my own money in at the same time, that I would get the money back when I did my taxes this year. So, I paid for it with a check from a 0% interest credit card and now I am doing my taxes. However, with the tax program that I am using (TaxAct), it asks if made any contributions to my IRA in 2004. I am thinking this would be considered to be a regular contribution, but I am not totally sure. And I don't have the money to contact a regular accountant. I just want to make sure I am doing it right so I don't get audited later on and find out I screwed up....

This is one of those gory details sorts of questions that generally require an account's input to get right. My advice, for what it's worth, is to prepare your taxes with a "hole" in them, and consider asking the IRS, themselves, for help.

My completely uneducated guess about how this is going to play out: when they paid that tax for you, they sent you some kind of 1099 form that indicates that they did so. When you figure your taxes, you'll figure them as if that tax had never been paid, but look it has, so therefore you owe that much less. This is exactly the sort of shenannigans that IRS computers probably look for to flag people for auditing, so it's all the more important to get it right with professional help of some sort.

i did get a 1099 form stating how much tax I paid..

I doubt they will give it back. You recieved the cash distribution from the account. That happened and you can't undo it. Most likely, all you can do, is claim the new deposits, as a deduction against current income.

The above is a totally worthless opinion of a pessimistic non accountant.