If all of my income is in a deferred compensation plan, will I still be able to make itemized deductions?

Career / Compensation, Financial Planning, Estate Planning
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August 2017
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Interesting situation, and one that seems to be done to reduce taxes to a minimum.  Itemized deduction (not tax credits) reduce your income that is subject to income taxes.  If your taxable income is zero, then itemized deduction will NOT help you as they cannot be used to earn a refund.  

Also, if you are married, your standard section for 2017 is $12,600 or if you are single your standard deduction is $6,300.  You can use either the standard deduction OR your itemized deductions whichever is greater.  So if you are married, your itemized deductions will not help you.

I would suggest that you also look into using the Roth Plan if available in your 457 plan as well.  This would not give you a deduction, but it would give you tax free growth and payout in retirement would be tax free.  Getting a deduction at a low (most likely 10% tax bracket), may be more fee beneficial than getting the tax free nature of the Roth.  If you don't have a Roth component, look into putting money into a Roth IRA instead.  

If you are really stuck on wanting a 0% tax bracket, put a little less into the 457 Plan and leave yourself $11,000 of taxable income from wages, use the itemized deductions to go to zero and put some money in a Roth on top of it.

Hpe this helps!

August 2017
August 2017
August 2017
August 2017