dmertz
Level 15

Get your taxes done using TurboTax

Given your relatively low tax rate, the deduction for a traditional IRA contribution will be relatively small and only defers taxation of that money to a future year; the money will eventually be taxable.  It would likely be better to take a long-term view of your finances and contribute the money to a Roth IRA instead.  You won't get any tax deferral on the contribution, but growth in the Roth IRA will be tax-free (instead of only tax-deferred as it would be in a traditional IRA) provided that you leave it in until age 59½ and at least five year from the beginning of the year for which you make your first Roth IRA contribution.  In addition, you can take your original contributions out of the Roth IRA at any time free of tax and penalty.  The benefit of tax free growth will mean that you'll likely get much larger refunds on future tax returns in retirement than you the smaller refund increase that you'll get now.

With either a traditional or Roth IRA contribution, you'll likely also qualify for a Retirement Savings Contributions Credit if you are not a full-time student, cannot be claimed as a dependent on someone else's tax return and made no distributions from retirement accounts in recent years.