Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
vjoe4545
New Member

I owe $4k to IRS so far; will contributing $4k to my IRA negate it completely?

 
1 Best answer

Accepted Solutions
jerry2000
Alumni

I owe $4k to IRS so far; will contributing $4k to my IRA negate it completely?

No, it will not. A deductible contribution to an IRA will reduce your taxes by the amount of the contribution times your marginal tax rate only. For example, if you are in the 25% marginal tax rate bracket a $4k contribution would reduce your tax by $1,000.

View solution in original post

2 Replies
jerry2000
Alumni

I owe $4k to IRS so far; will contributing $4k to my IRA negate it completely?

No, it will not. A deductible contribution to an IRA will reduce your taxes by the amount of the contribution times your marginal tax rate only. For example, if you are in the 25% marginal tax rate bracket a $4k contribution would reduce your tax by $1,000.
vjoe4545
New Member

I owe $4k to IRS so far; will contributing $4k to my IRA negate it completely?

Thank you
Dynamic AdsDynamic Ads
Privacy Settings
v