IRA Invest to lower AGI

[kilapapipa]

I can't edit the title now but it should be to lower Taxable Income and not AGI.

I have read about doing this and just did the math. We are at $71233 Taxable Income now. If we could invest $3333, it would be an +$835 adjustment in our tax liability. We will owe $161 now and I am happy with the way that came out. I think the trade off here would be worth it.

How would I go about investing this money into an IRA since the money I have has already been taxed.

In researching the internet, we have a 529, can we just invest there? We are not over 50 though, what is the limit for us age 41 each.

[jIM_Ohio]

529 is not a federal deduction (its a state deduction) unless you know something I don't.

[kilapapipa]

I know nothing about this so thanks. I may have read it wrong. The lights are on, but I am not hearing anything.

[creditcardfree]

529 is for college education.

You would need a traditional ira account at a bank, mutual fund or brokerage company. Any company you contact would be able to walk you through the application. Many of them can be done online. Then you send in a check or wire the company money.

[kilapapipa]

We have 403b's but you are talking about an after tax fund, correct. For instance, I contact one of my fund advisors and away we go?

Thanks for the info.

[creditcardfree]

Yes, a traditional IRA is an after tax fund, which is what you need in order to take the tax deduction you are referring to in your original post. In most cases, you can have the traditional IRA in addition to your 403b's.

You might want to consider a no load fund, with Vanguard, T Rowe Price and other mutual funds, to avoid paying a sales charge with most financial advisors. Generally, the sales charge is taken off the top of your investment, so if you send in $100, you actually only invest about $95. With no load funds, you do not pay this sales charge, so your entire $100 in invested.

Either way will work to accomplish your ira tax deduction.