Author: nicejoyj

Why it is important. Like your AGI, your MAGI can determine whether you qualify for certain tax benefits. One of the most popular is the ability to deduct your IRA contributions on your tax return. However, you may not qualify for that deduction if your MAGI is above a certain level. Your MAGI differs from… Continue reading Modified Adjusted Gross Income (MAGI)

Why it is important. Your AGI is the basis for several tax thresholds. Determining whether you qualify for certain tax credits Determining whether you can deduct medical expense Your state tax is based on this number. The first step is to find out your Taxable income. You can find this number in box#1 on your W2… Continue reading How to calculate Adjusted gross income [AGI]

Gross Pay  -   nontaxable wages [ HSA, Medical premium, Dental premium, uniform allowance]  -    Tax deferred wages [ Traditional retirement plan] Example Gross pay     3,000 Non taxable wages      200 [HSA]  + 150 [Medical] +   50 [ Dental] + 10 [ Uniform allowance] Tax-deferred wages   500   [… Continue reading How to calculate taxable wages [Box 1 on W-2]

Effect of Modified AGI on Deductible Contributions If You ARE Covered by a Retirement Plan at Work. https://www.irs.gov/retirement-plans/plan-participant-employee/2018-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-covered-by-a-retirement-plan-at-work Effect of Modified AGI on Deductible Contributions if You are NOT Covered by a Retirement Plan at Work https://www.irs.gov/retirement-plans/plan-participant-employee/2018-ira-contribution-and-deduction-limits-effect-of-modified-agi-on-deductible-contributions-if-you-are-not-covered-by-a-retirement-plan-at-work Note  The best way to reduce your AGI is making max contributions to employer-based retirement plans and contributing… Continue reading 2018 IRA Contribution and Deduction Limits –

1 Effect of Modified AGI on Deduction if You Are Covered by a Retirement Plan at Work https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work 2 Effect of Modified AGI on Deduction if You Are NOT Covered by a Retirement Plan at Work https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-not-covered-by-a-retirement-plan-at-work Best book to read before you start investing. The Simple Path to Wealth: Your roadmap to financial independence… Continue reading 2017 IRA Contribution and Deduction Limits

Yes and No Run the numbers on the calculator below.  This is the best calculator I could find online. https://www.tiaa.org/public/products-services/ira/calculators/eligibility Best book to read before you start investing. The Simple Path to Wealth: Your roadmap to financial independence and a rich, free life I like audiobook versions of this book Try Audible and Get Two… Continue reading Can I contribute to deductable IRA.

This is how it is calculated. Gross income - medical and dental insurance premiums HSA contribution - Uniform allowance =  Income that these taxes based on. 6.2 %  goes to social security 1.45% goes to Medicare For Example Gross income  4,000 medical and dental insurance premium   200 HSA Contribution      200 Uniform allowance… Continue reading How much SS tax and medicare tax are you paying