What you propose is allowable, and it may benefit you as long as you qualify to make deductibe contributions to an IRA account. Of course, you have to qualify to make penalty free distributions as well. One drawback is that if you qualify for a savers credit on contributions to your retirement accounts, you would need to subtract the amount of your distribution from the amount you contribute to determine the contribution amount for the credit. So, you may be denied the savers credit. The savers credit would apply to income under $34,000 for a single filer and $68,000 for married filing joint.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
