How can I increase my IRA contributions to reduce my tax liability?

[gskl]

Are you able to review my return and advise me?

[AmandaR1 · Accepted solution]

No, we're not able to review your return, but I can help you with information. To test your contribution limitations and tax benefits, you can simply enter the amounts into the software. Then, to make your contribution, reach out to your investment firm. You can deduct the total IRA contribution on your return and you need to make sure you contribute by your return due date, typically April 15th. Be sure to let the investment firm know this contribution is for 2016.

The total annual IRA contribution amounts are $5,500 (under 50 years old) and $6,500 (over 50 years old). This amount is deducted on your tax return (or contributions can be made before tax through an employer), so that your contributions are made before tax. 

The deduction for your IRA's are limited once income reaches a certain amount and phased out to zero. Modified Adjusted Gross Income (MAGI) is a subtotal on your return based on Adjusted Gross Income and adding back some deductions/exclusions.  See the summary from Fidelity in the screen shot below for the phase out ranges.