Can I deduct retirement plan contributions?

    Published: 06-16-2009
    Views: 13,747
    Goodman & Company Tax Director Art Auerbach discusses the benefits of deducting contributions made to your retirement plan.

    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.