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Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets. Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. 1. For a traditional IRA, for 2021, full deductibility of a contribution is available to covered individuals whose 2021 modified adjusted gross income (MAGI) is $105,000 or less (joint) and $66,000 or less (single); partial deductibility is available for MAGI up to $125,000 (joint) and $76,000 (single). In addition, full deductibility of a contribution is available for non-covered individuals whose spouse is covered by an employer sponsored plan for joint filers with a MAGI of $198,000 or less in 2021; and partial deductibility is available for MAGI up to $208,000. If neither you nor your spouse (if any) participates in a workplace plan, then your traditional IRA contribution is always tax deductible, regardless of your income. For 2022 full deductibility of a contribution is available to covered individuals whose 2022 Modified Adjusted Gross Income (MAGI) is $109,000 or less (joint) and $68,000 or less (single); partial deductibility for MAGI up to $129,000 (joint) and $78,000 (single). In addition, full deductibility of a contribution is available for non-covered individuals whose spouse is covered by an employer sponsored plan for joint filers with a MAGI of $204,000 or less in 2022; and partial deductibility for MAGI up to $214,000. If neither you nor your spouse (if any) is a participant in a workplace plan, then your traditional IRA contribution is always tax deductible, regardless of your income. 2. Exceptions include: first-time home purchase, qualified educational expenses, death, disability, unreimbursed medical expenses, health insurance if you are unemployed. Per the SECURE Act of 2019, as of 1/1/20, upon birth or adoption of a child, a IRA owner may withdraw up to $5,000 penalty-free from a Traditional IRA. Such distributions can be repaid. Brokerage services provided by Fidelity Brokerage Services LLC. Custody and other services provided by National Financial Services LLC. Both are Fidelity Investments companies and members of NYSE and SIPC. 560612.22.0 What happens if you contribute to an IRA and your income is too high?There are several ways to correct an excess contribution to an IRA: Withdraw the excess contribution and earnings: Generally, you can avoid the 6% penalty if you withdraw the extra contribution and any earnings before your tax deadline. 1 However, you must declare the earnings as income on your taxes.
At what income can you no longer contribute to an IRA?If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $140,000 for the tax year 2021 and under $144,000 for the tax year 2022 to contribute to a Roth IRA, and if you're married and file jointly, your MAGI must be under $208,000 for the tax year 2021 and 214,000 for the tax year ...
Who Cannot contribute to an IRA?Whether or not you can make a full contribution depends on your tax filing status and MAGI: Single: MAGI less than $129,000 for a full contribution or $129,000 - $144,000 for a partial contribution. Married filing jointly: MAGI less than $204,000 for a full contribution or $204,000 - $214,000 for a partial contribution.
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