You Still Have Time! 2022 IRA Contributions

2022 IRA Contributions Deadline

April 18, 2023, is the deadline to make your 2022 IRA contributions. The 2022 limit is $6,000 per individual for Traditional or Roth IRA. If you are age 50 or older, you can add a further $1,000 “catch-up” contribution bringing the total to $7,000.  If you are interested in learning more about the differences between a Traditional and a Roth IRA we’ve created a short video: Roth vs Traditional.

Anyone with earned taxable compensation (self-employed or from employment) can contribute to an IRA, up to the maximum contribution or your earned income, whichever is lower. The kind of IRA and the treatment of the contribution depends on your modified adjusted gross income (MAGI). There is one exception to this rule; a spouse with little or no earned income can make IRA contributions based on the other spouse’s earned income subject to the rules and limits below.

The rules for a Roth IRA are simple; if your MAGI is below $204,000 as a Married Filing Joint taxpayer, you can make a full contribution (see chart for all single/head of household limits and phaseout ranges).

Anyone with earned income can contribute to a Traditional IRA, but your ability to deduct those contributions depends on your situation and income:

• If a qualified retirement plan DOES NOT cover you or your spouse: you have no income limits on the ability to deduct your Traditional IRA contributions.
• If a qualified retirement plan covers your spouse but not you: you can make deductible contributions if your MAGI is below $204,000.
• If a qualified retirement plan covers you: your contributions are deductible if your MAGI is below $109,000.

The limits above are for full contributions. You may still qualify for partial contributions/deductibility if your income is in the ranges in the table below. You should consult your CPA to confirm your modified adjusted gross income and what type of IRA is best for your tax strategies.

Remember, you CAN make contributions on behalf of someone else. If you have, for example, a young family member who took a summer job for some extra spending money or to save for college and they did not make their full contribution to their IRA, you can make it for them. The same rules above still apply so make sure not to over-contribute. With the power of compounding interest, saving money in tax-advantaged accounts as early as possible is always a good idea.

Don’t forget 2022 HSA contributions have a different deadline of April 15, 2023. You can learn more about HSAs from Meghan Carson’s blog, The “Triple Threat” Savings Vehicle.

Call us at 907-272-7575 or email your advisor team to coordinate depositing your 2022 contribution.

Marcus Holzschuh
Paraplanner

3/20/23

^{Commentary: The opinions expressed are those of Alaska Wealth Advisors Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward looking statements cannot be guaranteed.}

^{Note: This material should not be construed as tax advice. You should always consult with your tax professional with regard to specific tax questions and obligations.}

^{Adviser Disclosure: Alaska Wealth Advisors is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about Alaska Wealth Advisors’ investment advisory services can be found in its Form ADV Part 2, which is available upon request.}