My consulting business did well enough this year that I had a bit of money due to the IRS. I planned on setting up an IRA this year since I’m in my mid-twenties. I like the tax-free potential of the Roth, but I also need to lower my AGI this year. Would it make sense to open and contribute a portion of my wages to a traditional account and deduct what I need to break even on taxes, and throw the rest into a Roth account? Not exceeding the $4,000 limit on contributions of course… The fees on the accounts should be negligable, considering that I’m working primarily with an Internet broker.
25% is my current tax bracket.

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