Will our taxes be any lower if my 62 year old wife takes $6500 from her 401k and puts it in her IRA acct, then takes that $6500 out of the IRA and pays down our mortgage?

Forum|Forum|7 years ago
June 4, 2019
3 replies
19 views

She retired 3/31/2017 and is no longer earning income. Estimated income this year for us might be 92-95,000 vs app $115 last year. Our other deductions are fairly standard.

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Best answer by null725

No, that will not reduce your taxes, it will increase them if the 401k/IRA contributions were made with pre-tax money.. What you use an IRA distribution for has no effect on your taxes.

SweetieJean

Alumni - Champ

"pays down our mortgage"
Mortgage principal is not deductible, just interest.

null725Answer

Level 13

No, that will not reduce your taxes, it will increase them if the 401k/IRA contributions were made with pre-tax money.. What you use an IRA distribution for has no effect on your taxes.

Opus 17

Level 15

No, assuming that you have earned income and are eligible to make the IRA contribution, the contribution is tax-deductible but the withdrawal is taxable so it's a wash.