Answer:

Yes. Anyone with earned income who is under age 70½ can open and contribute to a traditional IRA (Individual Retirement Account). The contribution limit is $5,500 for 2015 (unchanged from 2014), plus an additional “catch-up” contribution of $1,000 in 2014 and 2015 if you’re 50 or older. However, you may not be able to deduct your IRA contributions if you’re covered by a 401(k) plan at work. Whether or not you can deduct your IRA contributions depends on your filing status and annual income (adjusted gross income, or AGI). Specifically, for tax year 2015:

If your filing status is: Your IRA deduction is reduced if your AGI is between: Your deduction is eliminated if your AGI is:
Single or head of household $61,000-$71,000 $71,000 or more
Married filing jointly or qualifying widow(er) $98,000-$118,000 $118,000 or more
Married filing separately $0-$10,000 $10,000 or more

You may also qualify for a partial tax credit for amounts contributed to your traditional IRA or your 401(k) plan.

2024 Financial Planning Annual Limits

Download our two-page “Important Numbers” guide.  This quick reference guide covers the most important annual limits as well as figures that are commonly referred to during the year.  It includes: 

  • Tax rates for MFJ, Single and Estates
  • AMT annual limits
  • Standard deductions for MFJ and Single
  • Social Security annual limits (including earning limits)
  • Full Retirement Age chart
  • Social Security taxation summary for MFJ and Single
  • IRMAA Surcharges
  • Retirement Plan Annual Limits
  • Traditional and Roth IRA Annual Limits
  • Estate and gift tax annual limits
  • HSA annual limits 
  • And More

 

Thank you for your interest in Flores Wealth Planning

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