In order to avoid a big hit on IRMAA (in 2023, based on 2021 AGI), wife and I plan to make TIRA contributions before filing our 2021 MFJ return, reducing our joint MAGI by $14,000 (as I understand, we do NOT have to add back in TIRA deduction when computing MAGI for IRMAA purposes).
Problem is, she’s reluctant to do so, due to short-term cash flow issues.
Is it true that if she makes a TIRA contribution now (in early 2022), that she can immediately withdraw the funds, without penalty ? (We are both in our 60s). Effectively shifting taxable income from 2021 to 2022.
P.S. In case you’re wondering how we’re flirting with IRMAA and yet intend for our TIRA contributions to be fully-deductible … I am retired. She retired after working the first month or two of 2021. So she has enough compensation income to cover our 2 * $7000 contributions, but she elected not to participate in her employer’s retirement plan.