Vanessa A
Expert Alumni

Deductions & credits

No.  It reduces your taxable income dollar for dollar.  That means if you have taxable income of $10,000 and you contributed $1,000, you would now have taxable income of $9,000.  Using the 10% tax rate, your $1,000 contribution would take your taxes from $1,000 to $900 a savings of $100 of taxes. 

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