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Question
my company has a 401(k) plan, but I only started working since min July, can I still contribute some money to my IRA with tax deduction?
AI accountant’s answer:
Yes, you can still contribute to a traditional IRA and potentially qualify for a tax deduction, even if you started working mid-year and participated in your company's 401(k) plan. For the 2022 tax year, you can contribute up to $6,000 to an IRA ($7,000 if you are age 50 or older).
However, since you are covered by a 401(k) plan at work, there are income limits that determine if your IRA contributions are deductible. For the 2022 tax year, if you're filing as a single taxpayer or head-of-household, the deduction begins to phase out (reduce) when your modified adjusted gross income (MAGI) reaches $68,000 and is fully phased out when your MAGI reaches $78,000. If you are married filing jointly, the deduction begins to phase out at $109,000 and is fully phased out when your combined MAGI reaches $129,000.
You should calculate your MAGI and see if you're within the income limits to ensure your IRA contributions qualify for a tax deduction. Keep in mind that the deadline to contribute to an IRA for the tax year 2022 is April 15, 2023.
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