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
403b and traditional Roth contributions
403b and traditional Roth contributions
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Re: 403b and traditional Roth contributions
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.
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.
Re: 403b and traditional Roth contributions
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?
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Re: 403b and traditional Roth contributions
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.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?
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Re: 403b and traditional Roth contributions
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?
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.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?
The MAGI phase out range for 2014 deduction is $60k-$70k. https://turbotax.intuit.com/tax-tools/t ... 22699.html
JW
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