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Can I deduct retirement plan contributions?

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  • Art Auerbach

    Tax Director, Goodman & Company, LLP

    http://www.goodmanco.com/  
     

    Serving clients since 1932, Goodman & Company brings 75 years of knowledge and experience to the demands of today's ever-changing business environment. Throughout the past 75 years, we've never strayed from our mission-to provide each client with personal, high-quality service using the most up-to-date technology and resources.

  • Can I deduct retirement plan contributions?

    Basic information to prepare an individual income tax return, Form 1040 and the basic schedules. This video is designed for those individuals who want to undertake the preparation of their tax return. There are tips and pointers for those who have attempted this feat in prior years.

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  • Transcripts

    Host: Can I deduct retirement plan contributions?

    Aurthur Auerbach: The answer to that question is yes and you have got many choices more than I have time to go through here. But I would go seek some professional help, whether it's from a broker or a banker or an insurance person go on to the IRS website, go sit down with a Counselor somewhere, I will just give you a litany of what your choices are if you are self employed. There is a possibility you can do a deductible IRA, you can do what's known Solo 401(K) plan, you can do what's known as a simple plan, simple IRA, you can do a self-employed pension plan or SEP plan. So you have many, many opportunities to take a portion of the income that you have, put that away for your own benefit and create a tax deduction for this.

    Now if you are self-employed and you are contributing to a retirement plan, the deduction for the retirement plan contributions are on the front page of form 1040 in the adjustment section; the bottom of page 1. There is a line on there that says contributions to an IRA, there is another line that says contributions to a SEP or a simple or a self-employed retirement plan. So while you will use Schedule C for the calculation the deduction actually takes place on the front page of form 1040.

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