contributing to retirement plane to reduce taxable income?
How does 401K and pre tax IRA work with max contributions for 2008 tax year? I know max 401k is $15,500 (Im only 40yrs). How much can be contributed to an IRA after 15500? How about a non working wife what can she contribute to a retirement plan?
Public Comments
- For pre-tax IRA , you will need to meet threshold limits set by the IRS. The limit for 2007 is $4000 . You and your wife can contribute $4000 "each" if and only if you meet the threshold limit. Limit of IRA contributions are not affected by 401k contributions and vice versa. Personally, I would look at the Roth IRA. Withdrawals from both the 401k and pretax IRA are taxed when you retire but withdrawals from the Roth IRA is tax free. Check the following IRS website. http://www.irs.gov/taxtopics/tc451.html
