I was under the impression that you could contribute funds to an Trad IRA and claim those contribution via your tax filings, and that contribution would reduce your tax burden. But come to find out that if you have a company provided pension plan, you can't contribute as the system (TurboTax) will indicate you can't claim the contributions. Is this correct? If so, then what's the benefit of an IRA, since the money applied are earned money after taxes (like from savings or other funds) and wish to increase its value and reduce tax burden - this doesn't make sense. Why have a Trad IRA then, and just use a regular savings account.
An option is a Roth IRA where your contribution can grow tax free and you can withdraw the funds tax free after satisfying the qualifications.
Yes, there are limits to the deductibility of IRA contributions if you are covered by a retirement plan through your employer. To follow-up on the prior posts, below is the 2022 IRA Contributions and Deductions chart for those covered by an employer retirement plan. There is also a link below the chart to the IRS webpage that discusses IRA Deduction Limits for 2022 and 2023.
@SocMO
An option is a Roth IRA where your contribution can grow tax free and you can withdraw the funds tax free after satisfying the qualifications.
You can contribute to the traditional IRA, but since you are an active participant in a workplace retirement plan your deduction for the contribution might be limited depending on your modified AGI for the purpose. There are still ways that you might benefit from making a nondeductible traditional IRA contribution, such as if it might make sense to convert all of your traditional IRAs to Roth, so you are correct to question the benefit of a nondeductible contribution.
Yes, there are limits to the deductibility of IRA contributions if you are covered by a retirement plan through your employer. To follow-up on the prior posts, below is the 2022 IRA Contributions and Deductions chart for those covered by an employer retirement plan. There is also a link below the chart to the IRS webpage that discusses IRA Deduction Limits for 2022 and 2023.
@SocMO