With the tax deadline approaching quickly, even if you have a 403b at work, you still may be eligible to make a tax-deductible contribution to a Traditional IRA or a Non-deductible contribution to a Roth IRA and have it count towards 2022. Normally, if you contribute to an IRA or Roth, you have up until the sooner of your tax filing or April 18th to make a retroactive contribution for the previous year.
If you're trying to squeeze out a little more tax savings for 2022, the maximum IRA contribution for 2022 is $6,000 plus a $1,000 catch up if you were age 50 or older. But keep in mind, your tax deductible contribution could be limited if you have a plan at work, such as a 403b. For single filers, your contribution's tax deduction may be limited or eliminated if your modified adjusted gross income exceeds $68,000 and for married filers, that limit is $109,000.
In that case, you would be better off contributing to a Roth IRA (with no tax deduction), as long as your AGI falls below $129,000 for single and $204,000 for married filers. Yes, you wouldn't get a current tax deduction, but the future growth on a Roth IRA would be completely tax free in retirement (assuming you meet certain IRS guidelines). For more tips and strategies, check out one of our upcoming FRS Workshops at www. FRSWorkShop.com or give us a call at 386-299-2893.