Anyone with a traditional Individual Retirement Arrangement (IRA) may be eligible for a tax credit or deduction on their 2018 tax return if they make contributions by April 15th, 2019.
An IRA is designed to enable employees and the self-employed to save for retirement. Most taxpayers who work are eligible to start a traditional or Roth IRA or add money to an existed account.
Contributions to a traditional IRA are usually tax deductible, and distributions are generally taxable. Taxpayers can file their return claiming a traditional IRA contribution before the contribution is actually made. It must then be made by April 15th of this year.
Contributions to Roth IRA’s are not tax deductible, however, the maximum permitted amount of these contributions begins to phase out for taxpayers whose modified adjusted gross income is above a certain level:
- Those who are married filing jointly or qualifying widow(er), the level is $189,000.
- For those who file as single, head of household, or married filing separately and did not live with their spouse at any time during the year, that level is $120,000.
- Filers who are married filing separately and lived with their spouse at any time during the year, and amount of modified AGI reduces their contribution limit.
For Saver’s Credit the limits are:
- $31,500 for single and married filing separate
- $47,500 for head of household
- $63,000 for married filing jointly
If you need tax help, call our law office at 816-524-4949 or visit our website at Hoorfarlaw.com