Sep 11

Question by B. Cummings: Does how much you contribute into a roth IRA, take that much away from your taxible income?
For example if I contribute $ 2000 into a roth IRA, and had a taxable income of $ 35,000 would it now be $ 33,000 of taxible income?

Best answer:

Answer by engineer50
No. Roth contributions are made with after-tax dollars. There is no deduction from income.

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2 comments so far...

  • Ashley Baldonado Said on September 11th, 2011 at 10:36 pm:

    Your taxible income would now be $ 33,000. They do not tax the money that you put into the IRA but when you take it out they do. The object is to take the money out when you are older and retiring, when you do it that way they tax it with a lower tax rate.If you take it out when you are young they will tax you with a much higher rate.

  • Ryan Said on September 11th, 2011 at 11:15 pm:

    A traditional IRA will do what you are looking for. A Roth is taxed up-front, but you are not taxed on the back end when you withdrawal the money.

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