If my wife made a sizable IRA withdrawal to pay off credit card debt and it moved us into a higher tax bracket is there anything I can do to reduce my taxes?

For tax year 2023 there’s not much you can do. If you have an HSA you could contribute to it. If you are self employed you could contribute to a SEP IRA. 

At this time there are limited alternatives.

• If any of that money is left over, you can put it back into an IRA and get a deduction.
  • If you do it before April 15th, 2024, you can credit it to 2023.
• Provided she is at least 59 1/2, you can withdraw the money at any time without a penalty. It may be at a lower tax bracket.

To determine the amount you can deduct for your IRA, including if you have a retirement plan at work, you can calculate it with the following guidelines.

• In Tax Year 2023 - you can contribute $6,500 if you're under age 50 . $7,500 if you're age 50 or older.
• You stated that your income was within the limits.  This limit is not your income.
• The calculation is done based on (M)oditied (A)djusted (G)ross (I)ncome MAGI.
• Line 11 of your 1040 is your AGI.  This number is adjusted to get MAGI.
  • For calculation for a a Traditional IRA see: Worksheet 1-1. Figuring Your Modified AGI (IRS Pub 590)
  • For calculation of a Roth IRA see: Worksheet 2-1. Modified Adjusted Gross Income for Roth IRA Purposes (IRS PUB 590)
• Once you have determined MAGI you can see the chart below the worksheet to determine the maximum contribution.

Please contact us again with any additional questions