IRA deductibility
I have a couple of questions about IRA deductibility.
1) Single person with $ 80,000 wages (this is his FICA wages – 401K contributions), an active participant in a plan.
For 2022, the deductibility range is $ 68,000 – 78,000. If the person wants to contribute $ 6,000, is it partially deductible? I am asking because after the $ 6,000 is deducted, they will be at $ 74,000. Does the IRS look at where you are before or after you make the contribution, so do they look at $ 80,000 or $ 74,000?
2) Assume the same facts, except the person has a SEP IRA instead of a 401k. Are the results the same or would the person be able to deduct the IRA contribution also?
Permalink Submitted by David Mertz on Thu, 2022-10-20 15:46