Would like to maximize your Roth IRA contributions? However, you read or heard that there are income limits. So what do you do?
Hello, this is Noel Dalmacio, your ultimate CPA at LowerMyTaxNow.
If you want to put in $5,500 ($6,500 if you’re over 50) in your Roth IRA for 2017, your income must be less than $118,000 if you’re single or $186,000 if you’re married. Here are 5 ways to reduce your income:
1. Contribute to your employer’s retirement plan
You can put in up to $18,000 or $24,000 if you’re over 50.
2. Take advantage of your company’s flexible spending account (FSA)
If your employer is offering a health care and/or dependent-care flexing spending account, please contribute the maximum amount. For health care FSA, you can put in $2,600 and for dependent care you can put in $5,000.
3. Contribute to a health savings account
If you have a high-deductible health insurance policy, you can contribute up to $3,400 for self-only coverage or $6,750 for family coverage, plus a $1,000 catch-up contribution if you’re 55 or older.
4. Reduce business income. Review your expenses to make sure you did not overlook any additional deductions. Also, you can fund a business retirement plans to further reduce your business income.
5. Sell stocks for a loss. You can report up to $3,000 of capital loss to offset your income.
So those are five ways to make sure that you reduce your income so you can qualify for a Roth IRA contributions.
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Until then, this is Noel Dalmacio, your ultimate CPA at lowermytaxnow.com.