Although 2024 is in the rearview mirror, you may still have an opportunity to lower your federal income tax bill. One key strategy? Making a deductible Traditional IRA contribution before the April 15, 2025 deadline.
Who Can Contribute?
If you haven’t yet contributed to a Traditional IRA for 2024, you may be able to deduct up to $7,000 (or $8,000 if you were 50 or older by December 31, 2024). If you're married, your spouse may also be eligible.
There's no longer an age restriction on making deductible Traditional IRA contributions—so even if you're over 70 ½, you can still contribute.
Key Considerations
Earned Income Requirement – You must have earned income in 2024 equal to or greater than your IRA contribution. If you're married, either spouse’s income can count.
Income Limits – Your ability to deduct an IRA contribution depends on your Modified Adjusted Gross Income (MAGI) and whether you (or your spouse) participated in a tax-favored retirement plan in 2024.
2024 MAGI Phaseout Ranges for Deductible Contributions
Single (participated in a plan): $77,000–$87,000
Married, both participated: $123,000–$143,000
Married, one participated: $123,000–$143,000
Married, only spouse participated: $230,000–$240,000
If you didn’t participate in a tax-favored retirement plan, there’s no income limit for making a deductible contribution—just be sure you have enough earned income.
Why It Matters
A deductible IRA contribution not only reduces your taxable income for 2024 but also helps you grow your retirement savings tax-deferred. That’s a win-win!
📞 Take Action Before April 15! Verity CPAs can help you determine your eligibility and maximize your tax savings. Contact us at info@verity.cpa or call 808.546.5026 today!
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