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Show Last chance for IRA deduction By KENNETH J. ROSE Business Counselor With the approach of the April 15 income tax filing deadline, it is also the deadline for being able to obtain a deduction for a contribution contribu-tion to an Individual Retirement Arrangement (IRA), Keogh, SEPP Oor other private pension plan. An IRA can still be set up by the deadline. Keough's SEPP's and other plans generally had to have been set up by the end of last December De-cember and contributions can be made by the filing deadline. The new tax laws have cast some doubts in the minds of many taxpayers tax-payers about whether or not they could take a deduction for an IRA anymore. For many, the benefits have not changed. The deduction is still available. If neither the taxpayer or the spouse is covered under another employer sponsored retirement program they can each contribute up to 100 percent of their earnings up to a maximum of $2,000 in an individual account. If only one spouse works, a total of $2,250 can be contributed in a spousal account. In both cases the contributions contri-butions are fully deductible against income taxes if the contribution is made before April 15. For those who are covered by another pension plan, the deduction deduc-tion is also available in full if their combined adjusted gross income (AGI) is $40,000 ($25,000 for single taxpayers) or less. Those who have AGI between $40,000 and $50,000 ($25,000 and $35,000 for single taxpayers) tax-payers) are eligible for a partial deduction. de-duction. And those with an AGI over $50,000 ($35,000 for single taxpayers) cannot take the deduction deduc-tion but they can still make the contribution con-tribution and have the earnings grow tax deferred. |
