topic If I invest 6000 in a Roth IRA, does that give me a tax break in Retirement tax questions

If I invest 6000 in a Roth IRA, does that give me a tax break

HeatherLove — Sat, 21 Dec 2019 02:03:33 GMT

Re: If I invest 6000 in a Roth IRA, does that give me a tax break

VolvoGirl — Sat, 21 Dec 2019 02:08:40 GMT

No. Only a traditional IRA can be deductible. But a ROTH grows tax free so when you eventually take it out it comes out tax free including the interest.

A Traditional IRA you get a tax deduction now and pay tax on all the distributions.

Re: If I invest 6000 in a Roth IRA, does that give me a tax break

dmertz — Sat, 21 Dec 2019 12:08:25 GMT

A Roth IRA contribution might qualify for the Retirement Savings Contributions Credit, a tax credit that can reduce your income tax liability, the same as would a traditional IRA contribution. But as VolvoGirl said, other then the possible tax credit I've mentioned there is no immediate tax savings for making a Roth IRA contribution. The main benefits of a Roth IRA contribution is the tax-free growth, provided the holding requirements are met and tax- and penalty-free distributions of your original contributions at any time. For many people the long-term benefit of tax-free growth will be greater than the immediate tax deferral of a deductible traditional IRA contribution.