We’ve spoken in the past about annual contribution limits into qualified accounts, but have not focused on the nuances of the income limits for tax deductibility of those contributions.
It’s very important to speak with your tax preparer, as specific limitations will apply. For example, in the scenario where a spouse has a 401(k) and joint tax returns are filed. There comes a point where it may be more advantageous to make your IRA contribution into a Roth, as you won’t be able to deduct your contribution anyway, and when you do start to withdraw funds from that qualified account you will have the obligation of remembering what your basis was, or you will run the risk of being taxed more than you should.
Call us if you need help organizing the information you will need to make the best decisions regarding your qualified account. However, it’s important to contact a qualified tax professional if you have specific questions related to taxes.