How will the maximum roth contribution effect my refund?

Forum|Forum|7 years ago
June 4, 2019
1 reply
1 view

I have not made IRA contributions yet. I am considering it however, if I can calculate how much if effects my refund.

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Anonymous

Contribution to a Roth IRA are not tax deductible so in that way, it will not affect your return at all. If you want the deduction, you would need to contribute to a Traditional IRA. How much you will save depends on the tax bracket your taxable income falls in. If you contribute $2000, you could potentially save anywhere from $200 (10%) upwards.

There are qualifications you must meet to contribute. Please see the links below for more information.

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-contributions

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-li...

http://www.fool.com/knowledge-center/the-difference-between-annuities-ira-annuities.aspx

See the link below for 2016 tax brackets per filing status.

https://taxfoundation.org/2016-tax-brackets