[gjfix47]

I asked this in RETIREMENT and got no answers, I don't know how to change categories, so here it is again
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I have a traditional IRA that I have been contributing the maximum amount ($6,000) for several years. I get social security and I get a tax deduction each year and my taxable SS is reduced because I made a contribution. I have already made the maximum tax deductable contribution for 2009 and would like to withdraw $10,000 (I know the withdrawal is reported as income and is taxable). Can I still get the $6,000 deduction from taxable income and the $6,000 reduction of my taxable Social Security amount for 2009?

[ebaines]

Yes, you can do this. Just be aware that the withdrawal is added to your regular income, so could potentially affect things like the amount of deductions you're allowed to take, and in an extreme case could put you cover the limit for deducting your IRA contribution.

Just curious - why are you doing this? It seems to me that rather than cycling money in and out of an IRA in one year you'd be better off doing neither - you'd certainly have less paper work to mess with.

Also - your traditional IRA contribution is deductible only to the extent that you have earned income - meaning wages, salaries, bonus, and commissions, and taxable alimony. I am not aware that you can count SS income as earned income for this purpose - do you have a reference that says you can?

[gjfix47]

My pension is considered compensation and I get a W2 showing it as wages, so I can make a tax deductable contribution to my IRA. By contributing to the IRA it reduces the amount of my Social Security that is taxable and thus reduces my AGI. My tax is already zero because of Deductions and Exemptions and I caculate I could withdraw $4,000 from the IRA and still have a zero tax if it is allowed.