Traditional IRA

(redirected from Deductible IRAs)

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 ?
There is general agreement that, for those individuals who can choose between Roth and deductible IRAs, the major factor is the individual's income tax rate before and after retirement.
It is important to note that those with both deductible IRAs and nondeductible IRAs cannot choose to roll over only the nondeductible amounts.
Tax-deferred accounts include deductible IRAs and 401(k) type accounts.
Federal deficits, public policy on Social Security, allowing deductible IRAs or closing those "loopholes" all have an effect.
However, we can divide these into two main categories, deductible IRAs and nondeductible IRAs.
The plan is less complicated than a money purchase or profit-sharing plan and allows greater contributions than those for deductible IRAs.
Includes defined-contribution plans, profit-sharing plans, 401(k) plans, 403(b) plans, 457 plans, Keogh plans, Simplified Employee Plans (SEPs), SIMPLE plans and deductible IRAs.
For example, it increases the maximum income phase-out levels for deductible IRAs to between $80,000 and $100,000 of AGI for joint filers and $50,000 to $60,000 for single filers.
Gone are the days of deductions for interest on consumer debt, fully deductible IRAs -- and whatever else the Tax Reform Act of 1986 did away with.
Perhaps these excess funds can be used for deductible IRAs, stock options, Sec.
As deductible IRAs, the tax basis is zero since contributions were deducted in arriving at AGI.
With these accounts (which should be kept separate from any deductible IRAs you may have), you can't deduct the contribution, but the growth continues to be deferred from taxes until you withdraw the money.