Confusion about automatic investing from my bank account

[deek]

If I set up automatic investing every month from my bank account to a tIRA, those are funds that have already been taxed, but a traditional should have funds that are untaxed until when you pull it out correct? In this case, do I just report it a certain way come tax time?

[FIREball567]

Automatic monthly contributions is the same as putting in one lump sum. They're both money from the net pay in your bank account. However, if you put it in a tIRA and your MAGI is under the limit, then you can deduct it from your taxes. This essentially makes them tax deferred and you'll pay the taxes on them when you withdraw in the future.


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[FIPurpose]

If I set up automatic investing every month from my bank account to a tIRA, those are funds that have already been taxed, but a traditional should have funds that are untaxed until when you pull it out correct? In this case, do I just report it a certain way come tax time?

Look at tax form 1040 line 32. You deduct the amount you put into an IRA from your AGI. Right now you can either contribute to 2018 or 2019. If you contribute to 2018, then you deduct from the taxes you're doing now. Otherwise, it will be deducted from this year's earnings.

[nburns]

If I set up automatic investing every month from my bank account to a tIRA, those are funds that have already been taxed, but a traditional should have funds that are untaxed until when you pull it out correct? In this case, do I just report it a certain way come tax time?

Look at tax form 1040 line 32. You deduct the amount you put into an IRA from your AGI. Right now you can either contribute to 2018 or 2019. If you contribute to 2018, then you deduct from the taxes you're doing now. Otherwise, it will be deducted from this year's earnings.

I think you're referring to Schedule 1 line 32.

[deek]

Going to try my best to max out my IRA in 2019. Wish me luck!