You Can Still Reduce Your 2024 Taxes

2024 is in the rearview mirror but there is still time to reduce your taxable income for last year:

Make a tax-deductible contribution to your IRA.

If you qualify, an IRA contribution can be a great way to reduce your 2024 taxes. You are allowed to contribute up to $7,000. If you are age 50 or older, you can add an extra $1,000 for a total of $8,000. You basically just had to have worked last year (have earned income) to qualify to make an IRA contribution.

Plus, if you are married, you can double the amount with a spousal IRA.

If you are not covered by a retirement plan at work, you can deduct the full amount of your contribution, regardless of how much money you make.

If you do have a retirement plan at work, there are restrictions and limitations to qualify for the full deduction. Here’s a table that summarizes these rules. They are confusing so feel free to shoot me an email with any questions.

2024 Traditional IRA deduction limits

Filing Status	Modified adjusted gross income (MAGI)	Deduction Limit
Single individuals	≤ $77,000	Full deduction up to the amount of your contribution limit
	> $77,000 but < $87,000	Partial deduction
	≥ $87,000	No deduction
Married (filing joint returns)	≤ $123,000	Full deduction up to the amount of your contribution limit
	> $123,000 but < $143,000	Partial deduction
	≥ $143,000	No deduction
Married (filing separately)*	< $10,000	Partial deduction
	≥ $10,000	No deduction

If you’re self-employed, you can sock away a lot more by opening up a Simplified Employee Pension (SEP) plan before filing your taxes. For 2024, you can contribute up to 25% of your total compensation up to a maximum $69,000.

Please comment or send an email if you have any questions. Thanks!

Joe Baker, CFP®

Baker Asset Management, LLC

joebaker@bakerassetmanagement.com