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Level 1

Question

After seeing that I owed federal taxes this year I made a decision to make a 5K contribution to my Roth IRA. My Federal Tax due amount did not change. Should it have?

Forum|Forum|4 years ago
February 9, 2022
2 replies
12 views

No text available

TurboTax Deluxe Online

Level 10

No, it should not have changed your tax due unless you are eligible for the Saver's Credit. Since a Roth IRA is funded with after-tax dollars, it does not change your taxable income for this year. If you wanted to lower your taxes this year, you would contribute to a traditional IRA and your contribution would reduce your taxable income. For more information, see the differences between a Roth and a Traditional IRA here.

Level 15

you still have time to recharacterize the Roth contribution to a Traditional contribution.

Or withdraw it altogether.

BUT

first make sure you are eligible for a full deduction of that amount.