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Can I take a traditional IRA deduction for W-2 monies paid for vested RSUs in Retirement ?

Now in Retirement I have some income appearing on a W-2 from the company I retired from almost 2 years ago. The W-2 shows amount from finally vested Restricted Stock Units (RSUs) that were still in effect at time of Retirement. Both Fed and State taxes have been taken out. Shouldn't I be able to deposit some of this Post-Tax income into a Traditional IRA and take a 2024 Tax deduction to reduce my Tax Bill ?

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Accepted Solutions
JohnB5677
Employee Tax Expert

Can I take a traditional IRA deduction for W-2 monies paid for vested RSUs in Retirement ?

Yes, there is no age limit on making regular contributions to traditional or Roth IRAs. 

Both you and a spouse can contribute to either even if you are “retired”, provided you can meet these conditions.

  • You have earned income – this is taxable compensation, such as wages, salaries, bonuses, or self-employment earnings  
  • Unearned income, such as money from capital gains, dividends, or investment interest are not eligible.
  • You cannot contribute an amount that exceeds your earnings, and you can only contribute up to the annual contribution limits set by the IRS.

 

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2 Replies

Can I take a traditional IRA deduction for W-2 monies paid for vested RSUs in Retirement ?

4 aspects to consider here :

1. W-2 income statement has been received (from vesting RSUs only)

2. Vested RSUs are considered "ordinary income" and NOT a long term investment

3. W-2 shows NO contributions to a 401K

 

.......based on the above, and ignoring the Retired angle, I've decided to enter into Turbo '24 a Tax Deduction for a soon-to-be-made post-tax deposit into an IRA account I have, and Thank You Turbo Tax for showing me a Tax Refund INCREASE for both Fed and State (NY) taxes. 

 

Thats my story and I'm sticking to it unless strongly challenged by this very smart community of Turbo Tax and general Tax Code experts. Cheers to all (and Tax Deductions in Retirement). 🙂

 

JohnB5677
Employee Tax Expert

Can I take a traditional IRA deduction for W-2 monies paid for vested RSUs in Retirement ?

Yes, there is no age limit on making regular contributions to traditional or Roth IRAs. 

Both you and a spouse can contribute to either even if you are “retired”, provided you can meet these conditions.

  • You have earned income – this is taxable compensation, such as wages, salaries, bonuses, or self-employment earnings  
  • Unearned income, such as money from capital gains, dividends, or investment interest are not eligible.
  • You cannot contribute an amount that exceeds your earnings, and you can only contribute up to the annual contribution limits set by the IRS.

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
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