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Level 2
posted Feb 24, 2025 6:38:11 PM

IRA distribution & contribution help

I'm 60, in 2024 I had to take a 4,000 distribution from my IRA. They withheld tax. Months later I made a contribution of 5,000. Will I be able to use the entire 5,000 to lower my AGI (I'm self employed/ low income) or will it only lower it by 1,000? Thank you!

0 2 1104
2 Replies
Expert Alumni
Feb 24, 2025 6:49:11 PM

It will only lower your income by $1,000 (assuming it was a traditional IRA).  But, you do need to report these transactions separately, the withdrawal belongs on Wages & Income and the contribution belongs in Deductions & Credits.

 

 

 

Level 2
Feb 24, 2025 6:50:56 PM

Thank you so much!