I just turned 72 this month. My wife and I are both retired. Can I contribute (and if so, how much) to a traditional IRA for 2021 and be able to deduct the contribution?
I know, (because I just turned 72), that I don't have to take a withdrawal for myself (RMD) until 1st quarter of 2023 when I will turn 73. And then I know I must take the RMD for 2022 also by the end of 2023.
Thanks.
@21norman02 wrote:
Also, is there a limit on income (retirement income) that would preclude the deduction?
You must have compensation, which generally means income earned from providing goods or services (although there are rare exceptions). This would be a W-2 job, schedule C self-employment, or partnership income subject to self-employment tax. You can contribute up to $7000 for yourself and your spouse, or up to the amount of your compensation, whichever is less. Your ability to take a tax deduction for your contributions is subject to the same income rules as any other person—there are no special rules if you are over 72 or collecting social security, but the normal rules still apply.
Yes, because of the Secure Act of 2019, you can now contribute to a Traditional IRA at any age. You and your wife will each be able to contribute up to $7000 each in your individual Traditional IRA's.
And the entire $14,000 would be a deduction from my taxes??
Also, is there a limit on income (retirement income) that would preclude the deduction?
@21norman02 wrote:
Also, is there a limit on income (retirement income) that would preclude the deduction?
You must have compensation, which generally means income earned from providing goods or services (although there are rare exceptions). This would be a W-2 job, schedule C self-employment, or partnership income subject to self-employment tax. You can contribute up to $7000 for yourself and your spouse, or up to the amount of your compensation, whichever is less. Your ability to take a tax deduction for your contributions is subject to the same income rules as any other person—there are no special rules if you are over 72 or collecting social security, but the normal rules still apply.