IRA and HSA Eligibility

[RichFika]

My last day of work in 2021 was in February.  I had some money that was input into a 401K, but not nearly the max for the year of 2021.  I did not work any more in 2021.  Can I put money into an IRA to make up the max amount for 2021?  Do I have until 4-15-22 to make this input for tax purposes and to reduce my income?  Can I also input into an HSA - since I did not max this out as well?

Thanks,

Richard P. 

[FangxiaL]

You can put money into your IRA account, but you cannot put more than the maximum allowed for an IRA account ($6,000 for people under age 50 or $7,000 for people age 50 and over);

If you have left your employer and you are no longer covered by an HSA-eligible health plan such as High Deductible Health Plan (HDHP), you are no longer able to actively contribute to your HSA.

Prepare your tax return first to see if you can benefit from the tax deduction of your planned IRA contribution. You have until the due date to make your IRA contribution. 

[RichFika]

Hi Fangxial,

Thank you for the quick response.  Just to make sure I have this correct.  I am filing married filing jointly and I turned 65 in 2021.

I did put some money into a 401K in 2021.  I can still put $7,000.00 into an IRA for 2021 tax purposes - is that correct?  I can still do this IRA transaction by 4-215-22 - is that correct?

My wife put money into a 401K as well, but not the max. She is not working now.  Can she still put $7,000.00 into an IRA for 2021 tax purposes - is that correct?  I can still do this IRA transaction by 4-215-22 - is that correct?

Thanks again.

Richard P. 

[phone number removed]

[JillS56]

It depends.  You and your wife can still contribute to an IRA as long as you are within the limitations due to work plan 401k and income levels.    This article 2021 Deduction Limits contains a chart as to those limitations for Married Filing Joint.

The deadline to contribute to an IRA and still take the deduction on your 2021 up to the filing deadline for 2021 taxes.   This year the tax deadline is 4/18/2022.

[RichFika]

Thanks for the response.  This answers my question.

I have a new question for you on the 3rd stimulus payment.

I did not receive this in 2021.

Can I get this stimulus payment as part of the 2021 return process?

If so - what are the AGI amounts for married filing jointly?

Is there a prorated amount for different AGI amounts?

Thanks,

Richard Peterson

[JamesG1]

It is possible to receive the third stimulus payment as part of the 2021 Federal tax return.  The qualifications for the third stimulus payment are: 

• you were a U.S. citizen or U.S. resident alien in 2021,
• you were not a dependent of another taxpayer’s 2020 tax return, and
• you have a Social Security number. 

If you did not receive the third stimulus payment, you may receive that amount through a Recovery Rebate Credit found on line 30 of the 2021 Federal 1040 tax return.

IRS FAQ about the third stimulus payment states:

For higher income individuals, the payment amount is reduced when their adjusted gross income exceeds the following thresholds:

• $150,000 for taxpayers filing a joint return or filing a return as a qualifying widow or widower
• $112,500 for taxpayers filing as head of household
• $75,000 for eligible individuals using any other filing status

The third payment is reduced if their AGI is above these thresholds. No payment is made when AGI is at least the following amount:

• $160,000 for taxpayers filing a joint return or filing a return as a qualifying widow or widower
• $120,000 for taxpayers filing as head of household
• $80,000 for eligible individuals using any other filing status

The amount is prorated when the AGI falls between $150,000 and $160,000 for a married filing jointly tax return.