ir63
Level 2

How overtime deduction will affect my adjusted income for IRA contribution?

Will overtime deduction reduce my adjusted gross income or only my taxable income? For example, our adjusted gross income $136000 (married, filed joint return) and my qualified overtime is $5000. What will be our IRA contribution limit? With $136K it will be $3500 for each and with $131K ($136K minus $5K overtime) would be $5250 for each