Thank you so much for the reply!
It’s been a long time since my wife and I contributed to our Roth IRA’s. We maximize our SEP-IRAa’s every year on the 1120S. Initially I was confused by your saying our ‘retirement contribution was maximized’. Since there never used to be any ‘tax credit’ years ago on Roth IRA contributions, this was confusing me, because there’s no initial income tax break when contributing to a Roth. I was surprised to see it coming up when preparing the 1040. We each put in $3000 to our Roth IRA’s this year. To ‘maximize our contribution.’, it would need to be $6,000 each into the Roth IRA’s with no tax benefit on the return.
Do I understand this correctly to be something new in the last few years, that the IRS is giving you a tax credit during the same year you contribute to the Roth IRA? On our return, it’s not the $6,000 that was maximized, but this relatively new credit was maximized. And then this limited the small reduction in K-1 income?
I’m so grateful for the help you’ve given so far!
