Can I open an IRA to reduce my tax bill?
Being the procrastinator that I am, I just did a preliminary entry into Turbotax and found that for the first time ever, I owe a considerable amount (about 00) on my taxes. I think this is because the amount withheld from my bonus is much less than my federal tax rate (and actually the rate at which state tax was withheld was higher than my state tax rate, but the refund I'm getting there is not nearly enough to make up for the federal amount that I owe).
In any case, is it possible to open an IRA and contribute money to that to reduce my tax burden for 2012, now that it is April 2013?
From reading around, my salary may be relevant - my taxable income was roughly 0,000 in 2012.
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my taxable income was roughly 0,000 in 2012.
Indeed it is relevant. The highest AGI limit for deductible IRA contributions is 112K. So no, IRA contribution will not help you reducing your tax bill this year.
The deduction phases out starting from AGI limits of K in certain cases (for married filing separately), and phases out entirely for anyone at AGI of 112K (for 2012). The table linked describes the various deduction phase-out parameters depending on your filing status, and will probably be updated yearly by the IRS.
However this is only relevant if your company provides a retirement plan, as Joe mentioned. If your company doesn't provide a retirement plan but your spouse's does - then the AGI phase-out limit is 8K.
If neither you nor your spouse (if you have one) is covered - then there's no AGI limit, and you can indeed make an IRA contribution before April 15th that would be attributed to the previous year and reduce your tax bill.
Note that "provides" means the plan is available, even if you don't participate in it, any time during the year.
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