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If I have the standard deduction on my taxes (that is, I don't itemize), can I deduct IRA contributions? If so, would that be for Traditional or Roth IRAs?

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Yes, a contribution to a Traditional IRA is an above-the-line deduction assuming you meet the requirements here, so you don't have to itemize to receive it. You only get a deduction for a Traditional IRA; Roth IRAs are after-tax.

  • How would I set this up with my broker an employer? I'm confused at how to alter my payroll information to deduct directly into an IRA for a traditional IRA. – noname Sep 17 '14 at 21:09
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    IRA is Individual Retirement Account. It is totally separate from your employer. You go to a broker (online or in person) and tell them you want to set up a Traditional IRA, after making sure that is the correct choice for you instead of a Roth IRA. Then you contribute directly, not through payroll deductions. – Craig W Sep 17 '14 at 21:31
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    Traditional IRA contributions are pre-tax, but that doesn't mean it has to be deducted from your paycheck by your employer. You get the deduction in the form of either a larger return or smaller bill when you file your taxes. – Craig W Sep 17 '14 at 22:15
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    Yep you contribute the money and the amount you contribute goes right on the 1040 (hadn't heard the term above-the-line deduction before but thats basically what it means), and it reduces your taxable income that way. +1 – Michael A Sep 17 '14 at 22:17
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    @BenNelson A check on Google suggests that a number of banks offering IRAs do allow direct deposits to be setup. Presumably you'd do that the same way you'd add a second bank account to receive part of your pay even if the tax benefits only showed up when you got your refund the next year. – Dan Neely Sep 18 '14 at 12:27

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