Income thresholds also limit tax deductible contributions
to a traditional IRA.
You can make deductible contributions
to a traditional Individual Retirement Account on your 2010 return any lime before April 18.
Here's an example: A client owns an IRA worth $100,000, of which $45,000 is deductible contributions
IRA contributors must decide if they would like to contribute to a Traditional or a Roth IRA, and whether they are eligible for deductible contributions
to the Traditional IRA.
The Recycled Tire Research and Engineering Foundation has received 501-C-3 status from the Internal Revenue Service, positioning the foundation to receive tax deductible contributions
, bequests, devices, transfers and gifts.
In some conservative 412(i) plans, businesses have made annual deductible contributions
in excess of $200,000 for employees over age 50.
Your Traditional account has been open for a short period of time and most of the balance is comprised of non-deductible contributions
: Since there is little growth in your current IRA and since no taxes are owed on non-deductible IRA contributions, your tax liability will be low at conversion because taxes are only paid on the growth funds and on the deductible contributions
Thus, if a married couple is eligible to make deductible contributions
to an IRA, they may make a total deductible contribution
of up to $4,000, even if one of the spouses does not have any compensation for the year of the contribution.
This fact causes the number of years before the after-tax and after-penalty accumulation of a non-deductible IRA exceeds the after-tax accumulation of a non-IRA investment (breakeven point in years) to be greater for taxpayers with large IRA accumulations from deductible contributions
One reliable way to reduce the impact of higher tax rates, surtaxes, phaseouts and so on is to make tax deductible contributions
to retirement plans.
As with any trust whose funding is actuarially determined, the trust's earnings and the benefits actually paid to participants and beneficiaries may vary from the assumptions used to calculate deductible contributions
An employer funds such a plan by making annual deductible contributions
for eligible workers; the employees are not taxed on the contributions.