Question re: Tax Deductible IRA contributions

[creditcardfree]

Originally Posted by tinapbeana

income for 2006 is *well* under 75k. income for 2007 will be approx 74500 gross. riiiiiiiiiiiight under the wire!

And by continuing to contribute to a 401k this would reduce your gross taxable income. Then in addition, since you are married, you could also contribute to a traditional ira for $8000 taking the deduction, thus reducing your income some more. That assumes you have that much money to invest, too!!!

[tinapbeana]

Originally Posted by creditcardfree

And by continuing to contribute to a 401k this would reduce your gross taxable income. Then in addition, since you are married, you could also contribute to a traditional ira for $8000 taking the deduction, thus reducing your income some more. That assumes you have that much money to invest, too!!!

well, that's part of the problem: the new company i started with in august doesn't offer a 401k, so next year will probably be roth only. and as much as i would love to contribute the mas for DH and myself, i'm probably going to focus on just mine at first, since DH has 401k at his office and has just signed up for it.

[safari]

Originally Posted by tinapbeana

income for 2006 is *well* under 75k. income for 2007 will be approx 74500 gross. riiiiiiiiiiiight under the wire!

Next year (2007) the phase-out range for joint filers will be $80,000-90,000.

[creditcardfree]

We'll it least it was good information for others to feast their eyes on!!

We max our roths out first. This year (2007) to meet our 15% goal, we will have to have my husband put some money in the TSP through the government...this is like a 401k but no match.

[tinapbeana]

Originally Posted by safari

Next year (2007) the phase-out range for joint filers will be $80,000-90,000.

woohoo! that's good, cause i realized gross next yr will be 76500, just OVER the old wire. thanks for the info, safari

[vishenda]

Yeah your 401(k) contributions has nothing to do with the standard deduction or itemizing. Youre thinking of the adjustment for a traditional IRA contribution in arriving at your AGI (adjusted gross income). And no, you cant deduct your IRA contribution b/c you already saved the taxes on this money when you contributed it to your plan.

Since you bought a house, you will have mortgage interest and real estate taxes to itemize on Schedule A. If it isnt enough to itemize in 2006, you will be able to itemize in 2007.