Contributions to a traditional individual retirement account can be
tax-deductible in the year you make them. While IRS rules on IRA
contributions vary, you can generally deduct the full amount of an IRA
contribution if you and your spouse aren't covered by retirement plans
at work. If you are, your contribution might be limited based on your
adjusted gross income.
The amount you save in taxes will depend on your tax rate. For example, if you make a $6,500 catch up contribution and your tax rate is 28%, then the contribution would save you $1,820 in taxes.
Contribution limits if you are covered by a retirement plan
Contribution limits if you are not covered by a retirement plan but your spouse is
Contributions to a traditional individual retirement account can be
tax-deductible in the year you make them. While IRS rules on IRA
contributions vary, you can generally deduct the full amount of an IRA
contribution if you and your spouse aren't covered by retirement plans
at work. If you are, your contribution might be limited based on your
adjusted gross income.
The amount you save in taxes will depend on your tax rate. For example, if you make a $6,500 catch up contribution and your tax rate is 28%, then the contribution would save you $1,820 in taxes.
Contribution limits if you are covered by a retirement plan
Contribution limits if you are not covered by a retirement plan but your spouse is