dmertz
Level 15

Retirement tax questions

The $7,500 contribution does not reduce your tax dollar for dollar.  It is a tax deduction, not a tax credit.

 

The result on your tax return sounds correct.  It seems that without the $7500 deduction about $5950 of your taxable income falls in the 24% tax bracket.  With the deduction is seems that your taxable income is reduced to about $189,200.