403b and traditional Roth contributions

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Topic Author
EnjoyIt
Posts: 8244
Joined: Sun Dec 29, 2013 7:06 pm

403b and traditional Roth contributions

Post by EnjoyIt »

Can a single person contribute to both a company 403b and also a traditional IRA?

Here are the details
Single
no state tax
25% federal tax bracket
Income $59K
Work 403b contribution for 2014: $7K contribution with $3K match total $10K

Can this person also make a $5500 traditional IRA contribution?


footnote: The above numbers were rounded for ease of discussion
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
Alan S.
Posts: 12629
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 403b and traditional Roth contributions

Post by Alan S. »

Persons can definitely contribute. The question is whether the contribution can be deducted.

Person is just under the 2014 modified AGI limit of 60,000 where the TIRA deduction starts to be phased out. A full deduction is permitted. This presumes that modified AGI is being computed correctly.
Topic Author
EnjoyIt
Posts: 8244
Joined: Sun Dec 29, 2013 7:06 pm

Re: 403b and traditional Roth contributions

Post by EnjoyIt »

So, how do we know if it could be deducted? I ran the numbers in turbotax and it appears to increase the tax refund appropriately. Is this accurate?
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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Duckie
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Joined: Thu Mar 08, 2007 1:55 pm

Re: 403b and traditional Roth contributions

Post by Duckie »

EnjoyIt wrote:So, how do we know if it could be deducted? I ran the numbers in turbotax and it appears to increase the tax refund appropriately. Is this accurate?
See here for 2014 limits and here for figuring a reduced deduction (if necessary).
DSInvestor
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Joined: Sat Oct 04, 2008 11:42 am

Re: 403b and traditional Roth contributions

Post by DSInvestor »

EnjoyIt wrote:So, how do we know if it could be deducted? I ran the numbers in turbotax and it appears to increase the tax refund appropriately. Is this accurate?
Turbotax will determine whether the TIRA contributions are deductible or non-deductible. If deductible, the deductible amount will appear in line 32 of the 1040 form. I believe Turbotax has a feature to display the tax forms instead of the interview. If you contributed 5500 and see 5500 in line 32 of the 1040, you got the full tax deduction. If some of the TIRA contribution was non-deductible then the non-deductible amount will appear in form 8606 which turbotax will add automatically.
Wiki
JW-Retired
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Joined: Sun Dec 16, 2007 11:25 am

Re: 403b and traditional Roth contributions

Post by JW-Retired »

EnjoyIt wrote: So, how do we know if it could be deducted? I ran the numbers in turbotax and it appears to increase the tax refund appropriately. Is this accurate?
25% federal tax bracket
Income $59K
Work 403b contribution for 2014: $7K contribution with $3K match total $10K

Can this person also make a $5500 traditional IRA contribution?
Good question, nobody has clue about this the first time. What matters is what you really meant by "Income $59k"? Is this box 1 on your W-2?, or is it taxable income (1040 line 43)?, or adjusted gross income (AGI line 37)?......... but what matters is really MAGI. (modified AGI). See the link.

The MAGI phase out range for 2014 deduction is $60k-$70k. https://turbotax.intuit.com/tax-tools/t ... 22699.html
JW
Retired at Last
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