Hello! My daughter took a year off from college last year and became "self-employed" as a nanny/caregiver. She earned $7,083 ("self-employed") without any taxes withheld, along with $813 in W-2 income from a part-time job as she went back to school last Fall. She also has $151 in dividends from a UTMA. Currently, TurboTax Premier shows that she owes $1,014 to the Feds and $145 to Oregon State tax. In trying to reduce her tax liability, we've want to open an IRA and contribute to it. When I enter a $2,000 contribution for '21, the Fed tax of $1,014 remains unchanged, while the contribution does reduce her State tax liability. It seems to me they should both be lowered (both Fed and State). Could this possibly be a glitch or bug in the software? I would appreciate any insights anyone can share. Thank you!
