I contributed to RH Traditional IRA for 6500$ in Dec 2023. I and my spouse have employer sponsored 401k which we maxed for 2023. We wanted to claim additional 6.5k deduction but seems our MAGI is 161000$ and exceeds the IRS limit (it appears that it limits at 136000$ for traditional) for married filing jointly. Can I still claim IRA benefit by converting it to Roth today and claim 2023 benefit? I don’t have Roth IRA but can I still get the 6.5k$ deduction by converting to Roth today as MAGI for tax year 2023 should be less than 228k. #cpa #taxes
Thanks for the response. I am not sure but I think I made the mistake of contributing to traditional instead of Roth here. Although I believe I can keep money in traditional but downside is I won’t get the tax benefit
If you brokerage allows, in my case Fidelity does, convert the account to Roth IRA
Why would you put your after tax income and traditional IRA? you always put in Roth IRA. As far as I know if your income limits is higher, you should look into backdoor roth ira. Roth ira will only allow 6500 for the people whose MAGI is 138k or lower for single individual.
As far as I know, people who's income is beyond the set limit by IRS, you do not get to use Traditional IRA as deduction when you file for taxes. Y The benefit that you get is to contribute to Traditional IRA using after tax dollar and then convert it to Roth IRA. With Roth IRA, you have the benefit to grow the money tax free. "Grow tax free" money means at retirement, you can withdraw money without the need to pay taxes.