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Deductions & credits
If you don't have any income tax for the Saver's Credit to offset, then a Traditional IRA was not a good idea (you should have done a Roth IRA).
You may want to consider "recharacterizing" your contribution with your IRA custodian. That would retroactively treat it as a Roth IRA.
In your situation, it seems likely that would still give you the same result on your tax return (the Saver's Credit would offset any additional income tax), but you would have the benefits of a Roth IRA over the Traditional IRA. There are other potential factors involved (or example, if you have any different types of credits that are being carried forward), but at first glance, it seems like a no-brainer that you should "recharacterize" that IRA contribution.
‎February 26, 2021
1:08 PM