The only IRA contribution that will reduce your tax is a deductible contribution to a Traditional IRA. A deductible contribution reduces your tax by, at most. the amount of your contribution times your marginal tax rate.
- For example, if you can make a deductible contribution and you are in the 25% marginal tax rate bracket, then a $1 contribution reduces your tax by $1 X 0.25 = 25 cents.
- If you are in the 25% bracket then it would require a deductible contribution of 3,490 / 0.25 = 13,960 to reduce your tax to zero and you can not get there from here.