401K and IRA deductions - Calling Spartan

[idibezwada]

Here is my case

I am filling taxes as married jointly.

I don't have 401K at work or IRA contribution. But wife has 401K match at work so contributed 5% for 2019. So now to reduce my taxes, i am allowed to contribute upto $6K in traditional IRA till April 15th. So did open IRA accounts for both of us and contributed $6k each but all of it is sitting in cash for now.

Lets assumed total wages are 210K (assuming 105k each), how will i be taxed now?? I am not interest in contributing to IRA if i am not getting a tax advantage. Which of the below case is right?

1) Taxable income = 210000-5250(from 410k)-6000(My IRA)-6000(Spouse IRA)=192750+Taxes

2) Taxable income = 210000-5250(from 410k)-6000(My IRA)=186750+Taxes

3) Taxable income = 210000-5250(from 410k)=180750+Taxes

For case 2 or 3, If i am not getting a tax benefit, can I now withdraw the 6K i just transferred as I didn't file my taxes and included it or if its not possible, technically its after tax amount right,so can i convert it to Roth IRA?

ee brokergadiki call chesina 2hrs hold time...its all very bloody confusing..

 

 

[idibezwada]

@Spartan

[killbillpandey123]

I think your case is 3, because u guys already invested in 401k you are not eligible for Traditional IRA when doing joint filing.

You can convert to ROTH IRA or withdraw money I think.

[Spartan]

3 hours ago, idibezwada said:

Here is my case

I am filling taxes as married jointly.

I don't have 401K at work or IRA contribution. But wife has 401K match at work so contributed 5% for 2019. So now to reduce my taxes, i am allowed to contribute upto $6K in traditional IRA till April 15th. So did open IRA accounts for both of us and contributed $6k each but all of it is sitting in cash for now.

Lets assumed total wages are 210K (assuming 105k each), how will i be taxed now?? I am not interest in contributing to IRA if i am not getting a tax advantage. Which of the below case is right?

1) Taxable income = 210000-5250(from 410k)-6000(My IRA)-6000(Spouse IRA)=192750+Taxes

2) Taxable income = 210000-5250(from 410k)-6000(My IRA)=186750+Taxes

3) Taxable income = 210000-5250(from 410k)=180750+Taxes

For case 2 or 3, If i am not getting a tax benefit, can I now withdraw the 6K i just transferred as I didn't file my taxes and included it or if its not possible, technically its after tax amount right,so can i convert it to Roth IRA?

ee brokergadiki call chesina 2hrs hold time...its all very blood confusing..

 

 

First thing.. IRA money nuvvu already tax pay chesesav....

u wont get credit for IRA contribution while u contribute, IRA tax credit is post contribution always...

so u will be paying taxes for 

210K - 5250 (401k) - stad deduction (24k)

 

[idibezwada]

10 minutes ago, Spartan said:

 

First thing.. IRA money nuvvu already tax pay chesesav....

u wont get credit for IRA contribution while u contribute, IRA tax credit is post contribution always...

so u will be paying taxes for 

210K - 5250 (401k) - stad deduction (24k)

 

what do mean uncle? Traditional IRA contribution pretax avvali kada?

[Spartan]

10 minutes ago, idibezwada said:

what do mean uncle? Traditional IRA contribution pretax avvali kada?

yeah traditional aite..pre-tax...avi kuda add chesko deduction lo..

default ga roth anukunna...

but T IRA ki income limits unnai ankunta check..

[idibezwada]

11 minutes ago, Spartan said:

yeah traditional aite..pre-tax...avi kuda add chesko deduction lo..

default ga roth anukunna...

but T IRA ki income limits unnai ankunta check..

unna...but adi ardam kake kada ninnu pilchindi...I am not able to under stand for what amount i will pay taxes for...traditional 6000 deduct cheskovalo ledu ardam kavatla

[Spartan]

6 minutes ago, idibezwada said:

unna...but adi ardam kake kada ninnu pilchindi...I am not able to under stand for what amount i will pay taxes for...traditional 6000 deduct cheskovalo ledu ardam kavatla

joint income 104K limit varaku unte u can contribute 6K...a tarvata it will be pro-rated. 

traditional IRA general ga chala mandi vadaru they go for 401k rather....

anduke its kind of grey area for me.

[idibezwada]

5 minutes ago, Spartan said:

joint income 104K limit varaku unte u can contribute 6K...a tarvata it will be pro-rated. 

traditional IRA general ga chala mandi vadaru they go for 401k rather....

anduke its kind of grey area for me.

ok...will try to check with my broker then

[Moon_Walker]

38 minutes ago, idibezwada said:

unna...but adi ardam kake kada ninnu pilchindi...I am not able to under stand for what amount i will pay taxes for...traditional 6000 deduct cheskovalo ledu ardam kavatla

Yes man IRA u will not be eligible. Already u contributed to 401(k).

 

Convert to roth IRA if possible.

[idibezwada]

1 hour ago, Moon_Walker said:

Yes man IRA u will not be eligible. Already u contributed to 401(k).

 

Convert to roth IRA if possible.

is it possible?

[k2s]

6 hours ago, idibezwada said:

Here is my case

I am filling taxes as married jointly.

I don't have 401K at work or IRA contribution. But wife has 401K match at work so contributed 5% for 2019. So now to reduce my taxes, i am allowed to contribute upto $6K in traditional IRA till April 15th. So did open IRA accounts for both of us and contributed $6k each but all of it is sitting in cash for now.

Lets assumed total wages are 210K (assuming 105k each), how will i be taxed now?? I am not interest in contributing to IRA if i am not getting a tax advantage. Which of the below case is right?

1) Taxable income = 210000-5250(from 410k)-6000(My IRA)-6000(Spouse IRA)=192750+Taxes

2) Taxable income = 210000-5250(from 410k)-6000(My IRA)=186750+Taxes

3) Taxable income = 210000-5250(from 410k)=180750+Taxes

For case 2 or 3, If i am not getting a tax benefit, can I now withdraw the 6K i just transferred as I didn't file my taxes and included it or if its not possible, technically its after tax amount right,so can i convert it to Roth IRA?

ee brokergadiki call chesina 2hrs hold time...its all very blood confusing..

 

 

if income > 123k, traditional IRA not eligible

https://www.fidelity.com/retirement-ira/contribution-limits-deadlines

 

[AFDB_Director]

If your MAGI (Modified Adjusted Gross Income) is more than $194k, then no advantage in investing in Trad IRA and not eligible for ROTH IRA.

You can do backdoor Roth IRA. Ask your broker to convert your Trad IRA to backdoor Roth. is it vanguard? if so, you can do it online as well.

[Moon_Walker]

52 minutes ago, idibezwada said:

is it possible?

Atleast i read its possible. Can u chat with ur stock broker help desk. they should tell u in few min.

[AFDB_Director]

1 hour ago, idibezwada said:

is it possible?

Yes. I did it this year. Not eligible for Roth IRA and dont get any benefit to invest in Trad IRA. So converted my trad IRA to backdoor Roth IRA. I have vanguard accounts. You can call them and ask the process even though you are not a account holder. You can say that you are thinking of opening an account with vanguard.