Posted by (07/09/2020 American Life Insurance Guide Irvine) The IRS Internal Revenue Service issued a "Friendly Reminder" on Thursday,Before July 2020, 7, funds deposited into Traditional Individual Retirement Arrangements (IRAs) can enjoy 15 tax deductions when filing taxes.
Allow tax deduction first, then deposit
The IRS stated that we can declare this "deduction and exemption" money in advance in the tax form, and then open an IRA account to actually deposit the money in it.But the money must be deposited before July 7th, and no extension is accepted.
According to the IRS announcement, as of 2019, most taxpayers under the age of 70.5 can open oneTraditional IRA(Individual retirement account), or deposit money into an existing IRA account.For the Roth IRA, there is no age limit for taxpayers and can deposit money in it at any time.
How much can we deposit into our retirement account?
As of the end of 2019,Taxpayers can deposit up to $6,000 into individual retirement accounts.For taxpayers aged 50 or older, up to $50 can be deposited.
Tax deductions for office workers will be discounted
For office workers who have retirement benefits such as 401K, 403B, and Pension,You may not be able to enjoy the full tax deduction of the deposit IRA.If our adjusted gross income (MAGI, hereinafter referred to as income) meets the following conditions, then the money we deposit in the IRA account will not enjoy the corresponding tax deduction benefits:
- Those who are single, the head of the family, or those who file separate tax returns after marriage and whose income is between $64,000 and $74,000 are eligible for partial deductions.There is no deduction for more than $74,000.
- Couples who file a joint tax return with income between $103,000 and $123,000 enjoy partial deductions.There is no deduction for more than $123,000.
- The husband and wife file a joint tax return, and one of them has a retirement account provided by the job, and the income is between $193,000 and $203,000, and enjoys a partial deduction.There is no deduction for more than $203,000.
- Those who separate and file separate tax returns after marriage but live with their spouse and earn less than $10,000 are entitled to a partial deduction.There is no deduction for income over $10,000.
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There are no tax deduction benefits for Roth IRAs deposits
There is no tax deduction policy for deposits in Roth IRAs (Roth-type individual retirement accounts).However, as of 2019, if taxpayers' adjusted total income meets the following conditions, they cannot deposit in a Roth IRA account:
- If you are single, the head of the family, or those who file separate tax returns after marriage, you cannot deposit a Roth IRA with an income of more than $137,000.
- Couples who file a joint tax return with an income of more than $203,000 cannot deposit a Roth IRA.
- People who separate and file tax returns after marriage, but live with their spouse and earn more than $10,000, cannot deposit a Roth IRA.
Where can I open an individual retirement account?
Most financial institutions, such as insurance companies, brokerage firms, banks, credit unions, brokerage houses, etc., can open IRA retirement accounts, and they have basically achieved full online registration and management, allowing users to independently manage and view retirement anytime, anywhere Account.
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