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Level 2
March 20, 2021
Question

Why does Fed Tax Refund increase when I make Roth contribution?

  • March 20, 2021
  • 1 reply
  • 10 views
We are in the correct AGI range but it appears TT is not treating a ROTH IRA contribution as an after tax contribution. Our tax refund increases when I put in the maximum Roth contribution allowed.  Need to file but this appears to be something in TT that is not working correctly.

1 reply

Level 15
March 20, 2021

Perhaps you are receiving the Saver's Credit for your Roth IRA contribution.  If so, your Federal tax refund would increase.

 

Take a look at the following TurboTax article for more information:  What is the 2020 Saver's Credit?

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