IRAs and Taxes

My husband and I currenlty do not have any children and the past 2 years we have ended up paying in $2000 to $3000 to the IRS come tax time. We are trying to figure out how we can use our HSA/IRAs to invest some of our money so we don’t owe so much to the government with taxes after we already pay so much with each check. According to the IRA deduction limits for 2021 (on the IRS website), if your combined income for married filing jointly is over $125,000 (which ours is), you do not get any deduction at all on your taxes. Am I reading that correctly? Because our tax preparer suggested investing in a Traditional IRA but that’s really unfortunate if we do not get any deduction at all due to our income…what else could we do for deductions so we don’t have to pay so much additional in taxes every year?

Do either of you have employer sponsored retirement plans (401k, 403b, 457, SIMPLE IRA, etc)?

IF SO, that’s where you can contribute money to lower your tax burden. IF NOT, then you can indeed contribute to a Traditional IRA ($6K each) and get the tax break.

The rules around income limits for the traditional IRA are actually pretty confusing. I’ve spent a lot of time staring at the IRS website trying to figure it out. But this page clearly says: “Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.”

This page breaks down the income limits if you’re not covered by a retirement plan at work.

Hopefully your tax preparer understands that and you will indeed get the tax deduction?! Did you pose this question to them?