If I put $3000 in a Traditional IRA, and all $3000 is deductible, why do I still owe federal taxes? My income is below the threshold & I'm filing as single.

[SweetieJean]

Do you have any self-employment income?

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1901539-how-do-i-preview-my-turbotax-online-return-before-filing">...>

[rebeccagjohnson]

No self emp income and I had health care all year at my job

[macuser_22]

A deducible IRA does not mean you will not owe tax. The $3,000 deduction reduces your taxable income, not the tax. If you are in the 15% tax bracket (meaning that 15% of your taxable income is taxed) the a $3,000 reduction in income would reduce the tax by about 15% of that ($3,000 x .15 = $450). Or are you saying that you are getting a penalty because the $3,000 is an excess contribution.

[rebeccagjohnson]

Thank you, that was the answer I was seeking.

[macuser_22 · Accepted solution]

Answered in comments.