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rmcaward
New Member

It looks like i will owe about $9k to the IRS this year.... Can I open i new IRA account now and contribute $9k instead?

 
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JohnB5677
Expert Alumni

It looks like i will owe about $9k to the IRS this year.... Can I open i new IRA account now and contribute $9k instead?

It would be a challenge

 

Contributions for 2021 can be made to a traditional or Roth IRA until the filing due date, April 18, but must be designated for 2021 to the financial institution. Generally, eligible taxpayers can contribute up to $6,000 to an IRA for 2021.  You could possibly include a spouse, again with restrictions.

 

There are also restrictions if your employer has a retirement plan.

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It looks like i will owe about $9k to the IRS this year.... Can I open i new IRA account now and contribute $9k instead?

The maximum you can contribute to a 2021 Traditional IRA is $6,000 ($7,000 if you're age 50 or older), assuming you otherwise qualify for 2021.  And then the "tax break" you get is based on your bracket.  For example, if you are in the 22% bracket, the $6,000 will save you $1,320 in Federal taxes.

 

And be sure you can open and fund the IRA by the close of business today.

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