Solved: Can I contribute to a Roth IRA to reduce taxes owed?
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Can I contribute to a Roth IRA to reduce taxes owed?

 
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Level 7

Can I contribute to a Roth IRA to reduce taxes owed?

You may be able to increase your refund (or decrease taxes owed) by purchasing a Traditional IRA, and you have until April 17, 2018 to do so.

Although the Roth IRA is not tax deductible as is the Traditional IRA, both may qualify you for the Saver's Credit, which may also increase your refund.

What Is the Saver's Credit?

So, based on the above, your better chance to reduce taxes owed lies with the Traditional IRA

For 2017, you can contribute up to $5,500 of your earned income ($6,500 if over 50)

When you enter a contribution into TurboTax, the program will let you know if and how much of the contribution is deductible- you can then view the result on the refund meter.

You should make the above determination before you purchase an IRA

View solution in original post

1 Reply
Level 7

Can I contribute to a Roth IRA to reduce taxes owed?

You may be able to increase your refund (or decrease taxes owed) by purchasing a Traditional IRA, and you have until April 17, 2018 to do so.

Although the Roth IRA is not tax deductible as is the Traditional IRA, both may qualify you for the Saver's Credit, which may also increase your refund.

What Is the Saver's Credit?

So, based on the above, your better chance to reduce taxes owed lies with the Traditional IRA

For 2017, you can contribute up to $5,500 of your earned income ($6,500 if over 50)

When you enter a contribution into TurboTax, the program will let you know if and how much of the contribution is deductible- you can then view the result on the refund meter.

You should make the above determination before you purchase an IRA

View solution in original post

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