[Tax Question] refund - Roth IRA contribution = $?

[Togo]

i am trying to figure out whether or not i should dump my refund right into a Roth IRA so here's my logic (remember, i'm no accountant)

let's say i'm expecting a $1500 refund - and rather than receiving that refund, i just fund an IRA.

what would my new refund amount be?

is it safe to assume that if i'm expecting a refund of that amount and contribute that amount to an IRA that i will still get back some sort of a refund of say 20-30% of that amount because it's reducing my taxable income now by an additional $1500?

[dss LT1]

Roth IRAs are not tax deductible. Your refund would be the same. You get the tax benefit when you withdraw the Roth money in retirement - it is tax free then.

Your scenario would work with a traditional IRA, if you qualify.

David S. Schaefer, CPA

[Loud Pedal]

Roth IRAs are not tax deductible. Your refund would be the same. You get the tax benefit when you withdraw the Roth money in retirement - it is tax free then.

Your scenario would work with a traditional IRA, if you qualify.

David S. Schaefer, CPA

David, do you know if there is such a thing as a self managed or self directed roth 401k? I like the idea of tax free gains, but don't want to be at the mercy of some fund manager.

[Togo]

Roth IRAs are not tax deductible. Your refund would be the same. You get the tax benefit when you withdraw the Roth money in retirement - it is tax free then.

Your scenario would work with a traditional IRA, if you qualify.

David S. Schaefer, CPA

hey thanks, and that sucks!

any idea if there is a way to fund a roth IRA with pretax dollars? :D like some sort of automatic deduction every week or something?

or - can one open a regular IRA and shift funds between ROTH and regular without any penalties?

[dss LT1]

[dss LT1]

[P51tj]

or - can one open a regular IRA and shift funds between ROTH and regular without any penalties?

You can do this but you will end up with a new address.....what brand do you smoke????

[Eddie44]

or - can one open a regular IRA and shift funds between ROTH and regular without any penalties?

You can do this but you will end up with a new address.....what brand do you smoke????

Key phrase here is "without any penalties". Some guys don't see bunking with Bubba as a penalty

[Loud Pedal]

or - can one open a regular IRA and shift funds between ROTH and regular without any penalties?

You can do this but you will end up with a new address.....what brand do you smoke????

What I intend to do eventually is maintain both a roth and regular retirement fund. This way I can withdraw from either account depending on my tax situation in the year i withdraw it. Withdrawing gains from a Roth account is tax free, but you have to fund it with tax-paid dollars. This is usually advantageous if you plan on being in a higher tax bracket in retirement. Being self employed, its a bit of a gamble for me which is why i am trying to hedge it.

I would seek advise from a paid professional because every situation is different. But I am glad that there are so many investment vehicles available.