Question for the Money Doctors

Question submitted on Feb 25, 2023.

Question

Hi There,
My AGI filing jointly is around $159K - can I still contribute to a traditional IRA and avoid paying $5800 to the IRS which i now owe on my federal returns?
Thanks

Answer

You can certainly fund a traditional IRA by April 18, 2023 for 2022.  (That is extended to October 16, 2023 if you are located in certain counties in California, Alabama, and Georgia.)

However, the deductibility will depend on more facts such as whether you are married or not, whether you are covered by an employer retirement plan, or your spouse is covered by an employer retirement plan.

If neither you or your spouse is covered by an employer retirement plan, then you and your spouse can make a deductible traditional IRA contribution.

It gets more complicated if you and/or your spouse is covered by an employer retirement plan, there is a phase out based upon your income.   If so, your income is too high for a deductible traditional IRA contribution.

You should review your tax planning to make sure you have a sufficient amount withheld to avoid owing at tax time.

For additional information visit //www.360financialliteracy.org/