There’s still time to make a last minute 2023 IRA contribution and possibly claim a tax break. Here’s who qualifies

The federal tax filing deadline of April 15th is approaching, and individuals still have the opportunity to make tax-deductible contributions to individual retirement accounts (IRAs) for the 2023 tax year.

For 2023, the IRA contribution limit is $6,500, with an additional $1,000 catch-up contribution for individuals aged 50 and older.

However, not everyone is eligible for the tax deduction, and eligibility depends on three factors: 1.

Filing status: Single or married filing jointly 2.

Modified adjusted gross income: This is your gross income without certain deductions and adjustments.

3.

Workplace retirement plan: Participation in an employer-sponsored retirement plan, such as a 401(k) or 403(b), can affect your deduction eligibility.

If you do not have a workplace retirement plan, you are generally eligible for a full IRA deduction, regardless of your income.

However, if you participate in a workplace plan, your deduction may be limited or even eliminated depending on your income and filing status.

The IRS provides an eligibility chart to help you determine if you qualify for an IRA deduction based on your filing status and income level.

While last-minute IRA contributions may offer tax savings, it is important to consider your individual financial goals and timeline before contributing.

Experts recommend weighing the potential tax benefits against potential future tax issues or unintended consequences.

Additionally, it is crucial to consider your current financial priorities, such as major expenses, before using retirement savings for short-term needs.