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Richia Allen
Financial Advisor
WCCU Wealth Managemet
Located at Westerly Community Credit Union
122 Granite Street, Westerly, RI 02891
Phone: 401-637-4487
Email: richia.allen@lpl.com
March/April 2024
Save for Retirement and Lower Your Tax Bill?
You can do both! By contributing to a traditional individual retirement account (IRA) by the April 2024 tax filing deadline, you may be able to deduct some or all of your contributions on your 2023 income tax return.
Above-the-Line Deduction
Above-the-line deductions help reduce the amount of your income that is subject to federal income tax. Contributions to a traditional IRA are deducted directly from your gross income, which is used to calculate your adjusted gross income (AGI), which is the amount of income you report on your return.Who Is Eligible?
Your ability to deduct contributions to a traditional IRA is affected by how much you earn and whether you or your spouse has a retirement plan at work. For 2023, deduction limits for individuals who are covered by a workplace retirement plan are:- Single/Head of Household filers with Modified AGI (MAGI) of $73,000 or less, full deduction; $73,000 - $83,000, partial deduction; over $83,000, no deduction.
- Married filers with MAGI of $116,000 or less, full deduction; $116,000 - $136,000, partial deduction; over $136,000, no deduction.
- Married separate filers with MAGI less than $10,000, partial deduction; over $10,000, no deduction.
Single/Head of Household and Married Joint filers not covered by a workplace plan can take the full deduction.
What if Your Spouse is Covered?
Married joint filers with MAGI up to $218,000 can claim the full deduction when a workplace plan covers one spouse. A partial deduction is available with MAGI between $218,000 - $228,000. Once MAGI exceeds $228,000, no deduction is allowed. Married filing separately whose MAGI is $10,000 or less get a partial deduction.Contribution Limits
You can contribute up to $6,500, or your taxable compensation, if less, to a traditional IRA for 2023. Individuals age 50 and older can make an additional catch-up contribution of $1,000, for a total of $7,500.Reap the Benefits
Over time, even small contributions to an IRA can grow and compound, so don’t miss out on this opportunity. Your financial professional can provide guidance on contributing to an IRA.MAGI is your AGI plus a few items — like exempt or excluded income and certain deductions. The IRS uses MAGI to determine your eligibility for certain deductions, credits and retirement plans.
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Richia Allen is a financial advisor with, and securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Westerly Community Credit Union and WCCU Wealth Management are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using WCCU Wealth Management, and may also be employees of Westerly Community Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Westerly Community Credit Union or WCCU Wealth Management. Securities and insurance offered through LPL or its affiliates are:
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