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If you\u2019re getting ready to file your 2024 tax return and your tax bill is higher than you\u2019d like, there may still be a chance to lower it. If you\u2019re eligible, you can make a deductible contribution to a traditional IRA until this year\u2019s April 15 filing deadline and benefit from the tax savings on your 2024 return.<\/p>\n
Who\u2019s eligible?<\/strong><\/p>\n You can make a deductible contribution to a traditional IRA if:<\/p>\n For 2024, if you\u2019re a married joint tax return filer and you\u2019re covered by an employer plan, your deductible traditional IRA contribution phases out over $123,000 to $143,000 of MAGI. If you\u2019re single or a head of household, the phaseout range is $77,000 to $87,000 for 2024. The phaseout range for married individuals filing separately is $0 to $10,000. For 2024, if you\u2019re not actively participating in an employer retirement plan but your spouse is, your deductible IRA contribution phases out with MAGI of between $230,000 and $240,000.<\/p>\n Deductible IRA contributions reduce your current tax bill, and earnings in the IRA are tax deferred. However, every dollar you withdraw is taxed (and subject to a 10% penalty before age 59\u00bd, unless one of several exceptions apply).<\/p>\n Traditional IRAs are different from Roth IRAs. You also have until April 15 to make a Roth IRA contribution. But while contributions to a traditional IRA are deductible, contributions to a Roth IRA aren\u2019t. However, withdrawals from a Roth IRA are tax-free as long as the account has been open at least five years and you\u2019re age 59\u00bd or older. (There are also income limits to make contributions to a Roth IRA.)<\/p>\n If you\u2019re married, you can make a deductible IRA contribution even if you don\u2019t work. In general, you can\u2019t make a deductible traditional IRA contribution unless you have wages or other earned income. However, an exception applies if one spouse has earned income and the other is a homemaker or not employed. In this case, you may be able to take advantage of a spousal IRA.<\/p>\n What are the contribution limits?<\/strong><\/p>\n For 2024, if you\u2019re eligible, you can make a deductible traditional IRA contribution of up to $7,000 ($8,000 if you\u2019re age 50 or older). For 2025, these amounts remain the same.<\/p>\n In addition, small business owners can set up and contribute to Simplified Employee Pension (SEP) plans up until the due date for their returns, including extensions. For 2024, the maximum contribution you can make to a SEP is $69,000 (increasing to $70,000 for 2025).<\/p>\n How can you maximize your nest egg?<\/strong><\/p>\n If you want more information about IRAs or SEPs, contact us. Or ask about tax-favored retirement saving when we\u2019re preparing your return. We can help you save the maximum tax-advantaged amount for retirement.<\/p>\n \u00a9 2025<\/em><\/p>\n <\/body> If you\u2019re getting ready to file your 2024 tax return and your tax bill is higher than you\u2019d like, there may still be a chance to lower it. If you\u2019re eligible, you can make a deductible contribution to a traditional IRA until this year\u2019s April 15 filing deadline and benefit from the tax savings on […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,6,10],"tags":[8,11,12],"class_list":["post-17210","post","type-post","status-publish","format-standard","hentry","category-articles","category-individual-tax","category-news","tag-articles","tag-news","tag-updates"],"_links":{"self":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/comments?post=17210"}],"version-history":[{"count":1,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17210\/revisions"}],"predecessor-version":[{"id":17211,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/posts\/17210\/revisions\/17211"}],"wp:attachment":[{"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/media?parent=17210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/categories?post=17210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sfw.cpa\/news-and-guides\/wp-json\/wp\/v2\/tags?post=17210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
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