Unfortunately, vacation pay would be considered taxable income and would factored into your adjusted gross income. As xmasbaby0 stated, you do have the option of contributing to a Roth IRA before April 18, 2023 to reduce your taxable income.
With Roth IRA's there are a few eligibility limits. For single taxpayers in 2022:
- You can contribute up to $6,000 to a Roth IRA, or up to $7,000 if you are 50 or older, only if your income is $129,000 or less.
- You can make a partial contribution to a Roth IRA if your income is between $129,000 and $144,000.
- Once your income tops $141,000, you are not eligible to contribute to a Roth IRA.
For married couples in 2022,
- $6,000 or $7,000 contributions can be made for each spouse, if income is under $204,000.
- The right to make contributions is gradually phased out as income rises between $204,000 and $214,000.
For more information see the link below:
Boost Your Retirement Savings
@reneeskaf
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