Using a Traditional IRA for the Tax Deduction? You Might Want to Rethink That
It's always best to attack retirement saving from multiple angles. One way to do so is by using the multiple retirement accounts available to you, mainly because of their tax benefits. A 401(k) is the most popular type of retirement account, but it shouldn't be your only retirement account. Both Roth and traditional IRAs can be a great source of retirement income, and their tax breaks make them worthwhile.
If you find yourself leaning toward a traditional IRA over a Roth IRA for the potential tax deduction, here's why you might want to reconsider.
For tax year 2022, the maximum amount you can contribute to an IRA (both Roth and traditional combined) is $6,000, or $7,000 if you're 50 or older. What makes a traditional IRA lucrative is the fact your contributions may be tax deductible, depending on your filing status, income, and whether or not you're covered by a retirement plan at work. If you are covered by a retirement plan at your job, here's how much of your contributions you can deduct:
Source Fool.com
