Can I deduct a traditional IRA
contribution, or no?
I make 90k a year (gross), live in Maryland, single, no dependents
, no house no deductibles
, have some stock and borrowed from my Roth IRA
last year. I have student loans but I found out this year that if I make more than 80k, student loan interest
is not deductible - resulting in about 6k worth of tax
I have to pay (according to turbo tax
I had claimed 5 allowances
last year because in the past I was able to deduct my student loan interest (which is super high). This year, I just moved it down to 2 allowances in the hopes of avoiding this mistake come 2017.
I am trying to find out what can bring this down a bit (medical
bills won't work). I have a 401k at work and a Roth 401k. To test it out, I put $5,500 in a traditional IRA within Turbo Tax and it did bring down my debt by a lot, but I am not sure if that is actually correct. I know that it has to do something with my modified income
, but I am just not sure.
In addition, I am trying hard to avoid this same thing from happening next year, but every calculator I use seem to give me different totals for my take home pay. How do I know how much taxes are actually taken out of me if I claim 1 allowance? Is there a point where I reach a ceiling? As in no more than a certain percentage is taken out regardless of the number of allowances?
Bot***** *****ne, I don't want to end up with just $3500k a month in take home pay - I can't survive on that in Maryland and pay back debt!