SEP IRA

Archive for April, 2009

A Call for a Unified Action in Improving the IRA as a Vehicle for Equitable Development

Question: Can contributing to a SIMPLE IRA push me in a lower tax bracket?

If I contribute enough of my pre-tax SIMPLE IRA, will that put me in a lower tax bracket? Or does the tax bracket stay the same no matter what I contribute.

Answer: Yes, it can put you in a lower tax bracket.

But going to a lower tax bracket doesn’t mean that all of your income is all of a sudden taxed at a lower tax rate. We have a graduated tax system…different portions of your taxable income are taxed at different rates.

As a matter of fact, you get the greatest impact on your taxes if your IRA Contribution DOESN’T put you into a lower bracket. Because the the portion of the deduction that overlaps into the next bracket down only saves you taxes at the tax rate in the next bracket down.

Hope that helps…

FCC Open Commission Meeting, April 21, 2010

Jay Macc – Electric Blue (Prod. Dutch Beats)