What are the Traditional IRA Income Limits?

roth ira limits bookThe rules concerning maximum traditional income limits in 2015 vary according to the kind of IRA you possess, the income you make and your filing status. In case you are contributing towards multiple accounts, it is recommended that you be very careful. The process, if done incorrectly, will culminate in costly mistakes.

When it comes to a traditional IRA, the income limits are also called deduction limits. These limits refer to your contribution amount which can be deducted from the income prior to applied . In case you exceed income limits and you’re not eligible for a full deduction, it is still possible for you to contribute to a traditional IRA. The tax results are different in this scenario and you are required to file IRS form 8606.

Traditional IRA income limits changed from previous years in 2015. The maximum limits applicable to a traditional IRA became dependent on the AGI or adjusted gross income. Not only this, the limits also changed depending on whether or not you were covered by a retirement plan at your workplace.

Traditional IRA income limits applicable for 2015

In case your filing status identifies yourself as single or head of household, the IRA tax deduction applicable to you will phase out when the AGI tops $61,000. It will completely disappear at the moment you touch $71,000.

In case the filing identifies your and also your partner file as married filing jointly, the phase out of IRA deduction will begin when you touch $98,000 and ends at $118,000. This figure represents a rise of $2,000 compared to 2014.

In case the documentation is married filing separately, the environment is stacked against you as deduction gets phased out at less than $10,000. This is also no deduction of any kind of the AGI crosses $10,000.

  • In case another plan covers you-thanks to your employer- for 2015 tax year, the following income limits applicable to Traditional IRA holds true:
  • If the tax filing status applicable to you is head of household or single, and the modified gross adjusted earned income is $61,000 or less then you enjoy full deduction of Traditional IRA limit in 2015.
  • If the tax filing status applicable to you is head of household or single, and the modified gross adjusted earned income is $61,000 and less then $71,000 then you get phased out deduction of Traditional IRA limit in 2015.
  • If the tax filing status applicable to you is head of household or single, and the modified gross adjusted earned income is $71,000 or more then you no deduction will be permitted from Traditional IRA limit in 2015.
  • If the tax filing status applicable to you is married filing jointly, and the modified gross adjusted earned income is $98,000 or less then you enjoy full deduction of Traditional IRA limit in 2015.
  • If the tax filing status applicable to you is married filing jointly, and the modified gross adjusted earned income is $98,000 and less than $118,000 then your deductions begin phasing out.
  • If the tax filing status applicable to you is married filing jointly, and the modified gross adjusted earned
    income is $118,000 or more then you will not get any deductions at all.
  • If the tax filing status applicable to you is married filing separately, and the modified gross adjusted earned income is less than $10,000 then you will get phased out deduction.
  • If the tax filing status applicable to you is married filing separately, and the modified gross adjusted earned income is more than $10,000 then you will get zero deduction when it comes to Traditional IRA income limits.
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