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dannyvalenzuela5
New Member

Contribute to ira to save

It said I could contribute to an IRA to deduct something like $5500 if I did it by April. Linked to Mint, but how do I do this and add it to my return, how much do I need to contribute to save...?
2 Replies
KenH1
New Member

Contribute to ira to save

You have until April 15th, 2017 to make a Traditional IRA contribution for 2016.  The maximum contribution per year, for all IRAs and Roth IRAs combined, is $5500 ($6500 if you're 50 or older)

The deductibility of your IRA (Traditional IRAs only, Roth IRAs are not deductible) depends on your income, filing status, and whether or not you are covered by an employer-sponsored retirement plan (401k, pension, etc). 

TurboTax will figure this out for you, but I've included links to IRA deduction limits from the IRS website:

IRA deductibility - covered by employer plan

IRA deductibility - NOT covered by employer plan

Your IRA contribution (Traditional of Roth) may ALSO qualify you for the Saver's Credit.

The Retirement Savings Contributions Credit (Saver’s Credit) helps low and middle-income taxpayers save for retirement. Sometimes this is called the Credit for Qualified Retirement Savings Contribution or Retirement Credit. It’s a non-refundable tax credit which means it can’t reduce the amount of tax owned to less than zero.

Based on your income and filing status, you may claim a credit on your return for a percentage of the contributions you made to a qualified retirement plan.

You qualify for the credit if you’re:

  • 18 or older.
  • Not a full-time student.
  • Not claimed as a dependent on someone else’s return.

Also, in 2016 your adjusted gross income (AGI) can’t be more than:

  • $61,500 if married filing jointly.
  • $46,125 if head of household (with qualifying person).
  • $30,750 if single, married filing separately, or qualifying widow(er) with dependent child.

The maximum credit is $1,000 ($2,000 for taxpayers who are married filing jointly), but is often less due to other deductions and credits and is limited by income. 

I suggest entered a few IRA contribution scenarios into TurboTax to see how it impacts your refund.

Hope this helps.

whhouse
New Member

Contribute to ira to save

The current 2016 Turbo Tax Deluxe is not correct.  It tells me I cannot deduct because our MAGI of $122K is to high to qualify since MY SPOUSE (not me which I am not) IS COVERED BY AN EMPLOYER RETIREMENT PLAN.  The IRS CHART say  limit $184... Correct the program by update please so I can get my full deduction.

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