Reducing taxes on a large payout I have worked in local government for more than 20 years and have saved well over a thousand hours of time in a leave bank. The government has decided that they prefer to end this practice and are planning on buying me out in 2020. I am 47 and my wife is 50, she is a stay at home mom, and we have five kids. My annual salary is 116k but this will mean an additional 60k that I will receive in 2020. I am making plans to deal with this extra income in such a way as to minimize tax liability. I participate in a 457(b) at work and plan on setting that deduction to $730 biweekly on Jan 1 which should bring the total deferral to the annual max of 19k. I also intend on making additional investments to Georgia’s 529 education plan for each child, which will be deductible for state income taxes, but not federal. My main question deals with my eligibility to deduct investments into a traditional IRA. It looks like I could put $7,000 in my wife’s name into a traditional IRA under the non-active participant spouse clause which has a 2019 income limit of 193k and deduct the full 7k. Is this correct? If so, am I also eligible to make a deductible IRA contribution in my own name? Thanks in advance to anyone who can answer my question and or suggest additional options.
Submitted May 07, 2019 at 09:35AM by Notredamerock http://bit.ly/2Lsxvw4
