Time is fast running out, but you may still be able to score a tax break for 2022 with an Traditional IRA contribution. Here’s what you need to know:
For 2022, your maximum contribution limit is $6,000; plus an additional $1,000 if you were age 50 or older in 2022. Eligible couples could save $3,500 or more on their taxes. To qualify, you must meet certain criteria:
For most Taxpayers, you must make your contribution by April 18th, 2023.
Couples, filing jointly, or single filers with no company retirement plan, are fully eligible to contribute and deduct an IRA contribution, assuming their income is equal to or greater than the contribution amount.
If you (or your spouse) participate in a company retirement plan, eligibility depends on your ‘modified adjusted gross income’ (MAGI).
Married individuals who participate in company retirement plan:
Receive a full deduction with MAGI up to $109,000.
Receive a partial deduction with MAGI of more than $109,000 but less than $129,000.
Receive no deduction if MAGI is above $129,000.
Married individuals who do not participate in company retirement plan:
Receive a full deduction with MAGI up to $204,000.
Receive a partial deduction with MAGI of more than $204,000 but less than $214,000.
Receive no deduction if MAGI is above $214,000.
Single filers:
Receive a full deduction with MAGI up to $68,000.
Receive a partial deduction with MAGI of more than $68,000 but less than $78,000.
Receive no deduction with MAGI above $78,000.
The contribution April 18th deadline is fast approaching, and you should consult your financial or tax advisor to make certain if you qualify and if making a contribution fits into your long-term investment strategy.
For weekly insights, follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.
