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Level 2

Question

Traditional IRA Contribution

4 replies
32 views

How much of a tax deduction you receive on your 2023 income tax return if you max out contribution $8K before April 15?

Ask the Experts - MetLife IV - April 2024

Alumni - Intuit

The maximum contribution in 2024 to a Traditional IRA is $7,000 (plus a catch-up contribution of $1,000 if aged 50 or over).

The tax savings depends on your marginal rate.

See this IRS document.

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Sha CLE 216Author

Level 2

So, I am over 50, it would not be a flat $8K off my Gross Income amount?

Level 15

Yes it reduces your gross income. It doesn't directly reduce the tax. It reduces the tax by the tax rate you are in. Like if you are in the 20% tax bracket it will reduce the tax by 20% or $1,600.