I have 401k ($2500 / year) and my salary is $40,000(single). if I buy triditional IRA , I still can get 100% full deduction. Please advise.
Lynda
2006-12-27 01:08:18 · 4 answers · asked by Lynda 1 in Business & Finance ➔ Personal Finance
You contributions to a traditional IRA will be fully deductible. Table 1-2 on the page in the first link says the limit is 50K/year for single filers.
You may consider funding a ROTH IRA rather than a traditional IRA. It offers some more flexiblity than a traditional IRA(you can withdraw contributions for ANY reason with no penalty). If your taxable income is less than 30K, you are only paying 15% on your income, so the immediate tax savings of a traditional are pretty small.
2006-12-27 01:36:11 · answer #1 · answered by VATreasures 6 · 2⤊ 0⤋
For 2006 a single person can make upto $50,000 and still take the full deduction for a traditional IRA .. Between $50,000 -$60,000 in income for 2006 the $4000 (max contribution if your under age 50) deduction gets phased out.. There is a worksheet that the IRS has to figure out the amount you can deduct, but your deduction is reduced approximately $400 for each $1000 over $50,000 in income..
2006-12-27 22:04:08 · answer #2 · answered by Jager 3 · 0⤊ 0⤋
As far as I know if you have access to a 401k you get no deduction for a traditional IRA. The rules might have changed though.
www.irs.gov is a good place to look.
2006-12-27 09:11:56 · answer #3 · answered by parsonsel 6 · 0⤊ 2⤋
check with your tax preparer........to see if in your particular bracket.......that it is of an advantage to you to do it in the first place.
2006-12-27 09:16:34 · answer #4 · answered by purefire41 3 · 0⤊ 1⤋