{"id":20314,"date":"2017-06-14T12:00:00","date_gmt":"2017-06-14T12:00:00","guid":{"rendered":"https:\/\/www.hrblock.com\/tax-center\/"},"modified":"2021-07-07T12:43:42","modified_gmt":"2021-07-07T17:43:42","slug":"opening-an-ira-to-reduce-taxes","status":"publish","type":"post","link":"https:\/\/www.hrblock.com\/tax-center\/income\/retirement-income\/opening-an-ira-to-reduce-taxes\/","title":{"rendered":"If I contribute to a 401K plan, can I open IRA to reduce taxes?"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-53515 alignright\" src=\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/06\/tax-reduction-300x200.jpg\" alt=\"tax reduction\" width=\"300\" height=\"200\" srcset=\"https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/06\/tax-reduction-300x200.jpg 300w, https:\/\/www.hrblock.com\/tax-center\/wp-content\/uploads\/2017\/06\/tax-reduction.jpg 500w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>Regarding the ability to open IRA to reduce taxes, you might be able to contribute deductible amounts to an IRA. It depends on your income.<\/p>\n<p>You can contribute the lesser of:<\/p>\n<ul>\n<li>100% of your annual compensation<\/li>\n<li>$7,000 &#8212; $8,000 if age 50 or older<\/li>\n<\/ul>\n<p>However, if you&#8217;re covered by a retirement plan at work, your IRA deduction will be reduced or phased out. This is true if your modified adjusted gross income (AGI) is:<\/p>\n<ul>\n<li>More than $79,000 but less than $89,000 if filing single or head of household<\/li>\n<li>More than $126,000 but less than $146,000 if married filing jointly<\/li>\n<li>More than $0 but less than $10,000 if married filing separately<\/li>\n<\/ul>\n<p>If your income is more than these limits, and you open IRA to reduce taxes, you can still make the contributions, but you cannot deduct them.<\/p>\n<h2>Where to Go For Help With Retirement Savings Accounts and Taxes<\/h2>\n<p>Retirement and investment income brings special considerations come tax time. Whether you&nbsp;<a href=\"https:\/\/www.hrblock.com\/tax-offices\/local-offices\/#!\/en\/office-locator\/\">make an appointment<\/a>&nbsp;with one of our knowledgeable tax pros or choose one of our&nbsp;<a href=\"https:\/\/www.hrblock.com\/online-tax-filing\/\">online tax filing<\/a>&nbsp;products, you can count on H&amp;R Block to help you get back the most money possible.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Regarding the ability to open IRA to reduce taxes, you might be able to contribute deductible amounts to an IRA. It depends on your income. You can contribute the lesser of: 100% of your annual compensation $7,000 &#8212; $8,000 if age 50 or older However, if you&#8217;re covered by a retirement plan at work, your [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":53515,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24,48],"tags":[],"class_list":["post-20314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","category-retirement-income"],"acf":[],"yoast_head":"<title>Opening An IRA To Reduce Taxes | H&amp;R Block<\/title>\n<meta name=\"description\" content=\"Lean how opening an IRA can help reduce your tax burden with advice from the tax experts at H&amp;R Block.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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