Traditional IRA

(redirected from Deductible IRA)

Traditional IRA

A tax-deferred individual retirement account that allows annual contributions of up to $2000 for each income earner. Contributions are fully deductible for all individuals who are not active participants in employer-sponsored plans or for plan participants within certain income ranges.

Traditional IRA

An investment retirement account in which a worker makes tax deductible contributions up to a certain limit throughout his/her working life. Unlike Roth IRAs, contributions are tax deductible but withdrawals are taxed, effectively deferring tax on the account until the worker begins making withdrawals in retirement. Importantly, however, tax deductibility of contributions depends on one's tax bracket. The limit to annual contributions varies by year and is indexed to inflation. Traditional IRAs are allowed to invest in securities and, in practice, normally own common stock and certificates of deposit. See also: 401(k).

References in periodicals archive ?

So that meant fully contributing to your company 401(k) plan, fully funding your deductible IRA, etc.

Tax changes can affect your retirement Financial planners share tips for managing your money as you get older Changes

By combining the standard deduction ($6,300) and the maximum deductible IRA contribution ($5,500) for 2016, a child could earn $11,800 of wages and pay no income tax.

Give yourself a break: put the kids to work

While many of the past articles cited below relate to the conversion of a traditional deductible IRA to a Roth IRA, the same considerations are important in evaluating an in-plan Roth rollover under the provisions of the ATRA.

In-plan Roth rollovers under the ATRA: a new opportunity for younger taxpayers

If your client hasn't yet made a 2013 IRA contribution and you are wondering if they can make a deductible IRA contribution now, here are the three questions you must ask to find out the answer.

How to reduce your client's 2013 tax liability ... in 2014

One way to shelter D's investment income is by making a deductible IRA contribution.

Case study: contributing to a child's IRA

* Traditional deductible IRA. Your contributions may be fully or partially deductible and your savings grow tax-deferred, but your withdrawals are taxable.

Building your nest egg with an IRA: steps to do it right

Is the client eligible for a deductible IRA and were contributions made to it?

Retirement planning using a client's tax return

The maximum annual deductible IRA contribution for an individual is the lesser of (a) the maximum annual contribution amount or (b) the individual's earned income1 The maximum annual contribution amount is $5,000 in 2009.

Chapter 5: traditional IRA

For married individuals filing a joint return, if only one spouse is a participant in an employer-sponsored plan, the limit on deductible IRA contributions applies only to the participant spouse.

Chapter 51: Individual retirement plans (and SEPs)

At the other end of the tax leverage spectrum is the corresponding before tax investment of $1,538.46 [$1,000 / (1 - 0.35)] in a fully tax deductible, fully tax deferred vehicle such as a contribution to an IRC Section 401(k) plan, deductible IRA, a qualified pension plan, profit-sharing plan, IRC Section 403(b) TDA, SEP or SAR-SEP IRA, or SIMPLE IRA.

Chapter 45 Investment strategies for tax-advantaged accounts

If $3,000 before taxes is invested in a tax deductible IRA, the $3,000 would grow to $9,000, be taxed at 33.33 percent and yield $6,000 in after tax cash.

Present value pitfalls in accounting practice

If you are unable to make a deductible IRA contribution because of "active participation" in an employer provided plan, your spouse may still be able to make a deductible IRA contribution.

IRAs Still A Good Idea

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