Tax expert Maggie Klokkenga, CPA, CFP®, provides insights into your IRA and 529 inquiries. With an overwhelming number of questions leading up to the podcast, we couldn't cover them all in Mailbag. Instead, we gathered Maggie's expertise to tackle your concerns by topic. Let's get started!

What are the income limits for tax-deductible contributions to traditional IRAs, and how do they vary by filing status?

For 2019, if you're covered by a workplace retirement plan, the modified adjusted gross income (MAGI) limits are $74,000 for single filers, heads of household, or married couples filing separately without living together. For married couples filing jointly or qualified widowers, the limit is $123,000.

If you're married filing separately and lived with your spouse at any point in the year, the limit drops to $10,000. As your MAGI approaches these limits, the deductible amount starts to phase out. Here, MAGI refers to your AGI plus certain deductions, including the student loan interest deduction and specific rare individual deductions. If only your spouse is covered by a retirement plan, the same MAGI limits apply for both married filing jointly and separately.

What are the income limits for Roth IRA contributions?

In 2019, married taxpayers filing jointly can contribute to Roth IRAs if their MAGI is under $203,000. For singles, heads of households, and married couples filing separately who didn't live with their spouse during the year, contributions are allowed until MAGI hits $137,000. Furthermore, if you're married filing separately and lived with your spouse at any time during the year, contributions are not permitted once MAGI exceeds $10,000. Contributions to a Roth IRA will phase out as your MAGI approaches the limit, which includes your AGI plus certain deductions.

What does a back-door Roth IRA contribution entail, and when can it be utilized?

A back-door Roth IRA contribution allows individuals who exceed the MAGI limit of $203,000 in 2019 to still contribute. Instead of contributing directly to a Roth IRA, you first contribute to a traditional IRA and then convert that amount to the Roth IRA. Since this contribution is made with after-tax dollars, the conversion isn't taxable. This method is effective if you haven't funded a traditional IRA or if your balance is $0.

After depleting a 529 account for college tuition, are there any tax deductions available?

Even after a 529 account is used up, you can still maximize contributions while your child is in college to reap potential tax benefits available in your state. You can contribute to the 529 and immediately withdraw the funds for qualified expenses.

If you prefer paying tuition directly, check if you've claimed the American Opportunity Tax Credit, which provides up to $2,500 per student for four years. If already claimed, the Lifetime Learning Credit offers up to $2,000, with both credits phasing out at different income levels. There was also a Tuition and Fees Deduction, but note that it expired at the end of 2017.

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