The IRA Tax Break Explained - Traditional IRA Tax Deduction

The IRA Tax Break can put $6,000 into your retirement account, and lower your taxable income by $6,000.

Anyone, I repeat, ANYONE, can take advantage of the IRA Tax Break, regardless of if you’re self-employed or employed at another company.

Still, many people are not taking advantage of this simple tax break. And some of the people who are, are being surprised by a HUGE mistake they are making that are preventing them from taking this deduction.

So stay tuned to find out how all of this works, how to avoid the mistake many people make, and ultimately knock off $6,000 from your taxable income.

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Prior Videos:

Outline

Intro: 0:00
What is an IRA?: 1:43
Traditional vs. Roth IRA: 2:00
The Traditional IRA Tax Break: 3:30
The #1 Traditional IRA Mistake!: 4:15

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Disclaimer: The information provided in this video is for entertainment purposes only and is not meant to take the place of professional legal, accounting, or financial advice. If you have any legal questions about this video or the subjects discussed, or any other legal matter, you should consult with an attorney or tax professional in your jurisdiction (i.e. where you live).

[eugenegrudnikoff]

misleading video/false advertisement: Statement at 00:08: "Anyone, I repeat, ANYONE, can take advantage of the IRA tax break..." while the rest of the video specifies long established exceptions: if you are covered by retirement plan at work and make over $xx, no tax break at the time of the contribution.

[positivepatricia]

Thank you so much for being clear about this. I am enrolled in a certificate program. I wasn't sure if I needed to put the amount that was contributed from both couples (married and filing jointly) on line 32 of the 1040 tax form. I was mistaking IRA deduction as a withdrawal.

[rcwilson]

What happens if your taxable income after taking the standard deduction is already zero? It seems that the standard deduction would cancel out your IRA deduction, so you would end up paying taxes on your IRA contribution 2X. Is that correct?

[treesoelberg]

You still gotta pay taxes on it when you withdraw.

[elass]

Are the income limits to receive tax deductions for traditional Ira's based on adjusted gross income? I thought they were.

[anneraso]

Is the six thousand dollar limit for any amount of gross income? Or do they let you put an amount in based on a per cent age of your annual income?