Hello - quick question I wanted to run by the forum - I think it makes sense but just wanted another set of eyes. This is a high-level, conceptual question - I'm sure more detail would be helpful for some but not needed for what i'm asking (e.g. does this make sense?)
For 2017 we will need to pay around $2800 in taxes (another story - my wife didn't fill out her w4 correctly).
We are planning to buy a home in 2018 and have been saving funds for down payment/closing costs (~70K at Ally).
We did not make any contributions to IRAs yet in 2017 (another story for another day as well).
I was thinking it would make sense for my wife and I each max out our IRAs for 2017 (whether we can is TBD), which would reduce our 2017 tax liability to a much smaller number.
Then in 2018 when we purchase our house, remove the $5.5K penalty free from each account as a first-time home buyer.
So income taxes will be due on the money eventually (in 2018), but given there will be lots of tax deductions (even with the new law) involving the purchase of a house, these taxes would be reduced as well.
Does this approach seem feasible? (Seems like an obvious no-brainier to me, but perhaps i'm missing something)
Thanks!