Traditional IRA Tax Deductions
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- เผยแพร่เมื่อ 30 ก.ย. 2024
- In this video, I talk about the traditional IRA tax deductions. The traditional IRA can lower your taxable income. It's also a great way to save for retirement.
The traditional IRA can lower your taxes and increase your tax refund. The IRS reported lower tax refunds for 2018 and using a traditional IRA can lower your taxable income and boost your tax refund.
If you also use a 401k you can lower your taxable income and if you earn too much you could lower your taxable income to qualify for a traditional IRA.
There are income limits that you need to know.
• 2019 contribution limi...
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#travissickle
I am 55 years old with no passive income and very little set aside for retirement at this point. I have always been curious about the stock market and have witnessed some people who played the game right and retired early because they used the stock market. When I ask them, most said that they invested very little to start with, but their portfolio grew. I do have a significant amount of capital that is required to start up but I have no idea what strategies and direction I need to approach to help me make decent returns.
Buy index funds if you wanna be safe, though you’d probably be better off just going to Vanguard or something for that
@@troy0.2 Even with the right technique and assets some investors would still make more than others, as an investor, you should've known that by now, nothing beats experience and that's final, personally I had to reach out to a market analyst for guidance which is how I was able to grow my account close to a million, withdraw my profit right before the correction and now I'm buying again
@@Mason-vz2kl who is your financial coach, do you mind hooking me up?
@@Iक्रिप्टोइंडिया-n5p My consultant is Loretta Wilkinson I found her at a seminar where she was hosted and I reached out to her afterwards. She has since provided entry and exits points in the securities I focus on. You can look her up for supervision. I basically follow her trade pattern and I haven’t regretted doing so.
@@Mason-vz2kl As a newbie i am happy with what i have found about the mentioned financial assistance on the internet and have mailed her for assistance.
What if I can’t participate to my company’s 401 since they required 12 months of service? Can I use traditional Ira for the deduction for now?
Please advice those people that are over 65 years of age have
200k or more in there T IRA that earn 80k or more.
That want to pay down there home loan
Dang I have a good problem, I'm on track to make at least $125,000 for 2019. I already put $6,000 in my Roth IRA plus money in my regular brokerage account. I do not use my 401k offered from Union because they do not match, but I could. Is the only way I could lower my AGI is by using my 401k? What the 401k is offered through the union not employer? If I don't lower my AGI I have to withdraw some of my Roth IRA contributions. Do you know what the max income for a single person will be for 2020 to use a Roth IRA? I like to control my investments and have access to them that's one reason I don't use 401k.
Good video.
It sucks that they dont match your 401k man. That's the only reason I have mine open which is Union based too.
Brah! Mahalo’s Braddah Travis, super valuable info😮...u saved me some mula on tax deduction 🙏🤑
Lets say if single person has a $140,000 annual income and contributes the full $18500k into his/her 401k. Can that person still contribute to a roth ira?
Maximize workplace 401k match, then see if you can contribute towards an IRA.
@@donovanberserk4993 makes sense in most situations. Just like most rules, they apply most of the time but not always.
So tax deferred means the *gains* are not taxed right now? Obviously, I'm funding it with my after-tax income, unlike a 401K/403b.
Correct. The idea is you will be in a lower tax bracket when you retire for maximum savings.
So my work place has a retirement plan which I put money in a 457 sonif I made 80,000 for 2019 and I already added 2,000 to a traditional ira. What would happen?
Recharacterize it (put it into a Roth or non-deductible contribution). 6% excise tax (over contribution tax). I don’t think I’ve done a video on this yet. I know you’ve been asking about the 457 videos for months. Thanks for patience! Soon...
@@TravisSickle thanks I appreciate it
The math deduction or credit on an I R A isn’t as attractive. They often explain it that whatever you put in your IRA in a given year, you can deduct or credit that total amount from your tax liability. Not really. I see the IRS goes by the percentage of your tax bracket. Not good enough
As attractive as what? Why "Not really." and why is that not good enough? 🤔
Isn't the max a person can contribute if single and under 50 $6000 without being penalized 6%? The 401k contribution limits are much higher, correct?? I'm brand new to this was just curious.
From 8:19 onward::-- adding to IRA for 2018 taxes even tho it's currently 2019 to reduce your 2018 tax liability
This is so helpful, thank you! First time I've contributed to an IRA and so confused doing my taxes this year. I simply didn't "get" what deductible vs non-deductible even meant. This was so helpful for understanding.
I want to know good amount to withdraw each year. Age 74. Say transfer 10,000 from T IRA to regular Brokerage act in Jan. Why. I can Margin trade the 10K for up to 40k . Cannot do in IRA. Won’t pay taxes on withdrawal until April of following year.
Advise! (10 K above RMD)
Great content
This is incorrect. There is no tax deduction from a 401k
You have reduced you tax liability with a smaller income NOW, but you will pay the deferred tax LATER.
You paid 100% of the tax. Congratulations.
I have. 401k at work. That I contribute to. Not much. But I do. Doing my taxes I wanted to open a traditional ira. Both my wife and I have access to retirement plans. We make under 100k. I wanted to open a traditional Ira before 4/15 deadline. Would putting 5k in give me a tax credit?
I thought this was based on magi and not agi can you explain the difference?
They're basically the same, it's only relevant if your income is close to the limits. That being said, you would add back student loan interest, foreign earned income, savings bond interest...
It's a good question and I haven't done a video explaining the differences explicitly...but I do think I have a video going through the IRS magi worksheet somewhere. In any case, I'll add it to the list for future videos. Thanks! and let me know if you have any other questions.
Great info. Yes! i have a plan at work! (SDCERA) I also max out the 457. I'm single. If my Adjusted gross income is phased out! What can I do to lower my taxes to avoid writing a check at Tax time for 2019 ( I plan on using the standard deduction)
What is the meaning of phase out? How much can you contribute if you are higher income?
I feel like I swap back and forth between Roth and Traditional every time a watch a new video 😅
If you have tax credits that you can qualify for then use the traditional IRA/401k/retirement plan to get your AGI below so you qualify. Otherwise, Roth. Also, just post any questions, I'll answer them.
@@TravisSickle I'm in sales and around 80-100k+ gross. If I finish the year at $85k then what you say would be doable. But what if I end up at $100k and have already contributed $6k to a traditional IRA? Should I just commit fully to the Roth now?
The two IRA contribution limits are combined at $6k. Do you have a workplace plan? Use that if you can.
@@TravisSickle Right now I have employer 401k maxed out at 5% match. Then I have been sending 10% to a Robinhood brokerage account.
I am trying replace the Robinhood allocation in the most optimal way. I believe that would be maxing out an IRA (not totally sure on Roth/Trad). And then adding the remaining to 401k.
@@Slapsamillion more Roth 401k, 2022 you can get up to 20,500 into that 401k. The matches all go to traditional side regardless of employee contribution to Roth or Traditional 401k.
Where is the schedule 1 that we fill that amount in?
Question- so let's say I make 65k net of income tax. If i decide to put say 3k into a Roth IRA, will that contribution get taxed again (on top of income taxes)? I'm confused how that 3k is handled. If i put that same amount instead into a traditional IRA, it's just in that account now and won't be taxed? So Roth IRA is basically a double taxation to start (income tax and contribution tax), but allows you tax free withdrawal later?
Thanks Travis
@@alrocky Thanks Al
Thank you, I appreciate the information. What about if I transferred my 401K to an annuity account 2 years ago? Can I still contribute $6000 to an IRA?
Yes, it's not based on your annuity. It's only earned income, income limits, etc.
Thanks for the video Travis it answered a lot of questions I had. I got another question if you could answer what about donating money to charities will that be tax deductible? . I enrolled with vanguard and they offered me a charity account to help me lower my taxes the question is it worth it can I get a good return back?.....can you make a video about this I’m single and make below $65,000....thanks
Sickle Hunter Financial Advisors ....thank you for your answering Travis well I’m talking about charity donations example goodwill, Ronald McDonald, St.Jude Hospital, Salvation Army..Vanguard offers this account to lower your taxes but just don’t know if is worth it since they will be deducting from my paycheck...
so a person can contribute after tax dollars to a traditional IRA to reduce tax liability?
Yes, it’s possible.
what's the phase out rate for single having both 401k & IRA? for example, if MAGI is 70k what is the deduction rate? is it about half of full deduction??
right when i upload the comment and continue w/ your video, you say there's a link for phase out....hahah
Did you figure it out? If you need help let me know. Thanks for watching.
I’m single and drive for ride share (Uber and Lyft). I don’t have access to a work place plan so I don’t need to worry about how much I make, right?
Make sure you saving up because Uber/Lyft will send you a 1099 tax form. Depending on how much you make you may owe the IRS for earned income. Do you have a professional tax advisor?
I’ll make a 1099 video for uber/lyft shortly.
Great video!
Once rolled over to my rollover IRA, can I still contribute by transferring from my bank where my pay check is going?
Yes. You do not need a separate ira for contributions.
Ok. I will contribute (dollar cost) to my rollover IRA from my paycheck (taxes) after I get everything set up. Thank you!!!
Great vid . Simple and to the point. Cleared up my confusion about how the deduction is calculated. Thanks.
Thank you for putting this together! When we do take this money out at retirement, does it get taxed for both the principal and the profit/earnings?
But the question is for the people contributing to Traditional IRA not having the tax deductible due to phase out income bracket, it’s like they putting money after tax and at 59.5 year if they take out money how will they tax again on the principal? It feels like double taxation
I love how clearly you put this, thank you!
Thank you for this video Travis. I have a question. Are you able to open a traditional IRA if you are making 10K in 2019. I know I don't have a tax liability but I was told to close it because I do not qualify to open a traditional IRa and I should take it out before July 15 or I would get a penalty. Is this true?
Thank you for explaining. I was very confused about how this all work but things are making more sense after watching this
Travis, So if you put $5000 into the traditional IRA with post tax money from your bank account now in March 2020, aren't you going to end up paying tax on it again when you take the money out during retirement, or is there some tricky way where it tracks those dollars as already taxed?
So you are talking about a non-deductible contribution to a traditional ira. Those dollars go in after tax to a traditional ira, grow tax deferred and come out as ordinary income in retirement. But that ordinary income is ONLY on the growth. The benefit is in the tax deferral so you trade capital gains taxes over the years for ordinary income later.
Why short a 401k to maximize a IRA when you may miss the company match. The traditional 401k is still tax deferred. This may work better for someone that cares more about diversifying a portfolio. GREAT INFORMATION OVERALL!!
And now I know why they said to go dump the 5500 in my traditional ira then send my taxes in.....
So with these new tax rules a tradtional Roth should be the way to go since they cancelled all the deductions you can do
@@TravisSickle the reason I said that was because it offers u a deduction which lowers your tax bill
@@TravisSickle lol yeah that's what I meant
@@TravisSickle everything is great information to be learned. U talk. I listen
You can NOT contribute to a traditional IRA unless you get a W2. So if you make money some other way this is not helpful. I found this out the hard way.
That's not true. You can contribute other earned income such as self-employment income. Tell me more so I can help you fix the error.
Investment capital gains and dividend income do not qualify.
@Jay R That is true. That is not considered earned income but you still don’t need a w2.