In this video, I talk about the traditional IRA tax deductions. The traditional IRA can lower your taxable income. It’s also a great way to save for retirement.
The traditional IRA can lower your taxes and increase your tax refund. The IRS reported lower tax refunds for 2018 and using a traditional IRA can lower your taxable income and boost your tax refund.
If you also use a 401k you can lower your taxable income and if you earn too much you could lower your taxable income to qualify for a traditional IRA.
There are income limits that you need to know.
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Why short a 401k to maximize a IRA when you may miss the company match. The traditional 401k is still tax deferred. This may work better for someone that cares more about diversifying a portfolio. GREAT INFORMATION OVERALL!!
what's the phase out rate for single having both 401k & IRA? for example, if MAGI is 70k what is the deduction rate? is it about half of full deduction??
Great video!
Great content
You can NOT contribute to a traditional IRA unless you get a W2. So if you make money some other way this is not helpful. I found this out the hard way.
Thank you, I appreciate the information. What about if I transferred my 401K to an annuity account 2 years ago? Can I still contribute $6000 to an IRA?
so a person can contribute after tax dollars to a traditional IRA to reduce tax liability?
I have. 401k at work. That I contribute to. Not much. But I do. Doing my taxes I wanted to open a traditional ira. Both my wife and I have access to retirement plans. We make under 100k. I wanted to open a traditional Ira before 4/15 deadline. Would putting 5k in give me a tax credit?
Isn't the max a person can contribute if single and under 50 $6000 without being penalized 6%? The 401k contribution limits are much higher, correct?? I'm brand new to this was just curious.
I want to know good amount to withdraw each year. Age 74. Say transfer 10,000 from T IRA to regular Brokerage act in Jan. Why. I can Margin trade the 10K for up to 40k . Cannot do in IRA. Won’t pay taxes on withdrawal until April of following year.
Advise! (10 K above RMD)
Great vid . Simple and to the point. Cleared up my confusion about how the deduction is calculated. Thanks.
Thank you for explaining. I was very confused about how this all work but things are making more sense after watching this
Thank you for this video Travis. I have a question. Are you able to open a traditional IRA if you are making 10K in 2019. I know I don't have a tax liability but I was told to close it because I do not qualify to open a traditional IRa and I should take it out before July 15 or I would get a penalty. Is this true?
Where is the schedule 1 that we fill that amount in?
What is the meaning of phase out? How much can you contribute if you are higher income?
Once rolled over to my rollover IRA, can I still contribute by transferring from my bank where my pay check is going?
This is incorrect. There is no tax deduction from a 401k
You have reduced you tax liability with a smaller income NOW, but you will pay the deferred tax LATER.
You paid 100% of the tax. Congratulations.
Question- so let's say I make 65k net of income tax. If i decide to put say 3k into a Roth IRA, will that contribution get taxed again (on top of income taxes)? I'm confused how that 3k is handled. If i put that same amount instead into a traditional IRA, it's just in that account now and won't be taxed? So Roth IRA is basically a double taxation to start (income tax and contribution tax), but allows you tax free withdrawal later?
Thanks Travis
Thank you for putting this together! When we do take this money out at retirement, does it get taxed for both the principal and the profit/earnings?
Travis, So if you put $5000 into the traditional IRA with post tax money from your bank account now in March 2020, aren't you going to end up paying tax on it again when you take the money out during retirement, or is there some tricky way where it tracks those dollars as already taxed?
Dang I have a good problem, I'm on track to make at least $125,000 for 2019. I already put $6,000 in my Roth IRA plus money in my regular brokerage account. I do not use my 401k offered from Union because they do not match, but I could. Is the only way I could lower my AGI is by using my 401k? What the 401k is offered through the union not employer? If I don't lower my AGI I have to withdraw some of my Roth IRA contributions. Do you know what the max income for a single person will be for 2020 to use a Roth IRA? I like to control my investments and have access to them that's one reason I don't use 401k.
Good video.
So my work place has a retirement plan which I put money in a 457 sonif I made 80,000 for 2019 and I already added 2,000 to a traditional ira. What would happen?
Thanks for the video Travis it answered a lot of questions I had. I got another question if you could answer what about donating money to charities will that be tax deductible? . I enrolled with vanguard and they offered me a charity account to help me lower my taxes the question is it worth it can I get a good return back?…..can you make a video about this I’m single and make below $65,000….thanks
I love how clearly you put this, thank you!
I’m single and drive for ride share (Uber and Lyft). I don’t have access to a work place plan so I don’t need to worry about how much I make, right?
So with these new tax rules a tradtional Roth should be the way to go since they cancelled all the deductions you can do
And now I know why they said to go dump the 5500 in my traditional ira then send my taxes in…..
Lets say if single person has a $140,000 annual income and contributes the full $18500k into his/her 401k. Can that person still contribute to a roth ira?
Great info. Yes! i have a plan at work! (SDCERA) I also max out the 457. I'm single. If my Adjusted gross income is phased out! What can I do to lower my taxes to avoid writing a check at Tax time for 2019 ( I plan on using the standard deduction)