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Reducing AGI by Ira or HSA contributions
Posted on 1/21/23 at 12:16 pm
Posted on 1/21/23 at 12:16 pm
So far it looks like I’m gonna owe some to the IRS, about 4500. Combined AGI is $195k. Would contributing to my traditional IRA under year “2022” be worth it to offset what I owe? HSA? Or just suck it up and pay the bastards? Was not expecting a refund but didn’t expect to owe, either…
4
Posted on 1/21/23 at 12:25 pm to jacquespene8
yeah, if you haven't contributed to either one I'd try to max them out if you can. I think you'd save over $1k in taxes
Posted on 1/21/23 at 12:27 pm to jacquespene8
You can't deduct a traditional IRA contribution with that AGI
Posted on 1/21/23 at 12:33 pm to jacquespene8
Gotta pay em sometime?
Income tax rate decreases when your reportable income decreases, so
you report less,
you pay less.
Question: How much money do you separate yourself from in the form of a plan contribution to reduce/eliminate a percentage of income tax payment? Ex. You "deposit" 5k to save paying 1.5k. In both moves, you give money away. One gives hope of growth and also an opportunity for an increased income tax rate at distribution in the future.
I apologize for the lengthy post, but much isn't known about your circumstances. My opinion is to pay the tax now because of my current available deductions, and look for creating tax free moves for later use. Current tax is historically low now. My .02 cents worth, which is worth half now, due to inflationary expense over a 30 yr. period.
Income tax rate decreases when your reportable income decreases, so
you report less,
you pay less.
Question: How much money do you separate yourself from in the form of a plan contribution to reduce/eliminate a percentage of income tax payment? Ex. You "deposit" 5k to save paying 1.5k. In both moves, you give money away. One gives hope of growth and also an opportunity for an increased income tax rate at distribution in the future.
I apologize for the lengthy post, but much isn't known about your circumstances. My opinion is to pay the tax now because of my current available deductions, and look for creating tax free moves for later use. Current tax is historically low now. My .02 cents worth, which is worth half now, due to inflationary expense over a 30 yr. period.
Posted on 1/21/23 at 12:38 pm to GEAUXT
Total aside question:
If you have an employer plan your contributing to? If none, then is it deductible?
quote:
You can't deduct a traditional IRA contribution with that AGI
If you have an employer plan your contributing to? If none, then is it deductible?
Posted on 1/21/23 at 6:37 pm to jacquespene8
quote:
Reducing AGI by Ira or HSA contributions
If you’re going to be writing checks to one or the other, the first one I’d write would be for a fully funded HSA. The IRA contribution depends on your legal/financial status.
Maybe I’m missing something, but why would you not take advantage of whatever you’re due?
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