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goldy24k2
New Member

Can I reduce the tax amount owed by contributing to an IRA?

Currently, TurboTax is showing I owe Federal and State taxes.  Can I reduce these taxes by contributing to an IRA?
2 Replies
SweetieJean
Level 15

Can I reduce the tax amount owed by contributing to an IRA?

Yes, if you qualify to contribute to a Traditional IRA.  You must do so for 2020 by May 17 (2021).

 

But note that a few states do not have this provision for state taxes.

DanaB27
Expert Alumni

Can I reduce the tax amount owed by contributing to an IRA?

Yes, your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. Please see IRA deduction limits for details.

 

The total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:

  • $6,000 ($7,000 if you're age 50 or older), or
  • If less, your taxable compensation for the year

 

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