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Right now my federal tax is $1490 How much would I have to put into an IRA to reduce it?

 
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dmertz
Level 15

Right now my federal tax is $1490 How much would I have to put into an IRA to reduce it?

If your federal income tax liability is only $1,490, this suggests that most of your income falls in the 10% tax bracket.  Being in the bottom tax bracket makes a deductible traditional IRA contribution a poor tax strategy and you would not be able to contribute enough to a traditional IRA to reduce your income tax liability to zero.  You would likely be far better off paying the $1490 tax and making a Roth IRA contribution.

If you meant to say that your balance due is $1,490, it's impossible to say what benefit you would get from a deduction for a traditional IRA contribution without knowing everything on your tax return.  You can always enter a traditional IRA contribution into TurboTax to see the effect, then take it back out if you don't like the result.

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1 Reply
dmertz
Level 15

Right now my federal tax is $1490 How much would I have to put into an IRA to reduce it?

If your federal income tax liability is only $1,490, this suggests that most of your income falls in the 10% tax bracket.  Being in the bottom tax bracket makes a deductible traditional IRA contribution a poor tax strategy and you would not be able to contribute enough to a traditional IRA to reduce your income tax liability to zero.  You would likely be far better off paying the $1490 tax and making a Roth IRA contribution.

If you meant to say that your balance due is $1,490, it's impossible to say what benefit you would get from a deduction for a traditional IRA contribution without knowing everything on your tax return.  You can always enter a traditional IRA contribution into TurboTax to see the effect, then take it back out if you don't like the result.

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