If we add to a retirement account for 2017, how does this affect the amount we owe the IRS? I believe we can do a catch up.

[PaulaM · Accepted solution]

Contributions to a traditional individual retirement account can be tax-deductible in the year you make them. While IRS rules on IRA contributions vary, you can generally deduct the full amount of an IRA contribution if you and your spouse aren't covered by retirement plans at work. If you are, your contribution might be limited based on your adjusted gross income.

The amount you save in taxes will depend on your tax rate. For example, if you make a $6,500 catch up contribution and your tax rate is 28%, then the contribution would save you $1,820 in taxes.

Contribution limits if you are covered by a retirement plan

Contribution limits if you are not covered by a retirement plan but your spouse is