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4994 Lower Roswell Road NE, Suite 4, Marietta, GA 30068
Phone: 770-971-9141
Email: ifp@incompassfp.com
March/April 2024
Contribute to Retirement and Lower Your Tax Bill?
You can do both! By contributing to a traditional individual retirement account (IRA) by the April 2024 tax filing deadline, you can deduct some or all of your contributions on your 2023 income tax return.
Above-the-Line Deduction
Above-the-line deductions help reduce the amount of your income subject to federal income tax. Contributions to a traditional IRA are deducted directly from your gross income, which is used to calculate your adjusted gross income (AGI), the income you report on your return.Who Is Eligible?
Your ability to deduct contributions to a traditional IRA is affected by how much you earn and whether you or your spouse has a retirement plan at work. For 2023, deduction limits for individuals who are covered by a workplace retirement plan are:- Single/Head of Household filers with Modified AGI (MAGI) of $73,000 or less, full deduction; $73,000 - $83,000, partial deduction; over $83,000, no deduction.
- Married filers with MAGI of $116,000 or less, full deduction; $116,000 - $136,000, partial deduction; over $136,000, no deduction.
- Married separate filers with MAGI less than $10,000, partial deduction; over $10,000, no deduction.
- Single/Head of Household and Married Joint filers not covered by a workplace plan can take the full deduction.
What if Your Spouse is Covered?
Married joint filers with Modified Adjusted Gross income (MAGI) up to $218,000 can claim the full deduction when a workplace plan covers one spouse.A partial deduction is available with MAGI between $218,000 and $228,000. Once MAGI exceeds $228,000, no deduction is allowed. Married filing separately whose MAGI is $10,000 or less get a partial deduction.
Contribution Limits
You can contribute up to $6,500, or your taxable compensation, if less, to a traditional IRA for 2023. Individuals age 50 and older can make an additional catch-up contribution of $1,000, for a total of $7,500.Reap the Benefits
Over time, even small contributions to an IRA can compound, so don’t miss out on this opportunity to help grow your retirement fund and potentially reduce your federal income tax bill.CONTACT US
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