how much can i deduct from a traditional ira?

Question

i have a traditional ira. i know u can contribute up to $4000 at a given year. i was told traditional ira is tax deductible. im in the 28% tax bracket in nyc. so how much can i deduct if i contribute up to $4000, $3000, $2000, or $1000 in a given year? thx in advance.

Answer 1

For 2006 the contribution limit was $4000 or $5,000 if you were age 50 or older. I've also attached a link to the irs website for IRA's. But if you want to read it I hope you do it when you've got a lot of time, it's 107 pages. You also have until have until the due date of your tax return without extensions to make an IRA contribution. So you would have had until April 17, 2007 to make an IRA contribution for 2006. Also, if you are covered by a retirement plan at work, then your IRA deductions starts getting reduced, and can be phased out when your AGI hits a certain level, depending on your filing status.

Answer 2

Your asking a question that has a couple of "it all depends"

If you're single, then you can deduct 100% if your AGI is under 52K, partial between 52K(+$1) and 62K(-$1), then no ded for above 62K.

IF you are in the 28% and single (AGI single above 74K) then NONE of the IRA can be deducted.

But if you're married, that changes the whole equation.

But check with your accountant or tax adviser for detailed information.

~td

Answer 3

you do not positioned any earnings an IRA till you've maxed out the employers higher decrease on the 25% tournament. it truly is loose money. once you max that matching 25%, contained in the 401k, then you definitely can positioned earnings an IRA (as a lot as $5,000 in preserving with 365 days) and get the tax deduction. There aren't any rule or decrease ties between a 401k and an IRA. btw you need to have any IRA account with a sturdy low-priced inventory broking service. An IRA is only a tax secure egg shell and also you could make investments in any inventory or mutual fund contained in the egg shell. even with features those stocks and mutual money have will be taxed as undemanding earnings once you retire and make withdrawals. That way you stay away from wide capital benefit taxes. And in case your inventory and mutual fund making an investment contained in the IRA does thousands more advantageous helpful than your "sharebuilder" contained in the 401k, you need to imagine about rolling the 401k money over to the IRA. a good number of human beings that've awful 401k funding selections attempt this on an annual foundation when they get their loose tournament money from the organisation.

Answer 4

All contributions to an IRA are fully decuctable on your federal income tax 1040.............Nuf Said

Answer 5

If you are eligible to contribute $4K and you do, you can deduct $4K.