How to Deduct Retirement Plan Contributions

Male: Can I deduct retirement plan contributions?
Art: The answer to that question is yes. And you’ve 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 the counselor somewhere. I’ll just give you a litany of what your choices are if you are self employed. There’s a possibility you can do a deductible IRA, you can do what’s known as a solo 401 K plan, you can do what’s known as a simple plan, S-I-M-P-L-E, simple IRA, you can do a self employed pension plan, a set plan. So you have many, many opportunities to take a portion of then income that you have, put that away for your own benefit and create a tax deduction for this. Now, if you are self employ and you are contributing to a retirement plan, the deduction for a retirement plan contributions are on the front page of form 1040 in the adjustment section, the bottom of page one. There is a line on there that says contributions to an IRA, there’s another line that says contributions to a set or a simple or a self employed retirement plan. So while you use schedule C for the calculation, the deduction actually takes place on the front page of form 1040.


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