Contributions
I began contribution to an IRA in the 70’s based on net dollars – after taxes. When did the law change so that you could make your contribution based on gross dollars and thereby delay paying taxes until it is withdrawn? Thank you.
I began contribution to an IRA in the 70’s based on net dollars – after taxes. When did the law change so that you could make your contribution based on gross dollars and thereby delay paying taxes until it is withdrawn? Thank you.
Permalink Submitted by William Tuttle on Mon, 2016-09-26 20:30
Since the very first tax year (1975), you have always been able to make pre-tax dedcutible contributions if you were not an active participanct in a workplace retirement plan.There was a short period (tax years 1982 – 1986) where everyone could make pre-tax deductible contributions without restrictions.Since tax year 1987 if you were an active participant in a workplace retirement plan you have only been able to make pre-tax deductible contributions if your income is below certain MAGI levels. Also, this was the first year that non-deductible (after-tax) contributions were allowed. So I don’t know how you made after-tax contributions in the 70’s
Permalink Submitted by Karen DiClemente on Wed, 2016-09-28 02:21
Thank you. This was very helpful.