What gets a bigger tax deduction? re IRA?

Question

What allows for a bigger deduction 1000 in a traditional IRA or 1000 in a ROth IRA?

Answer 1

The traditional IRA will give you a tax deduction now, the Roth does not. The Roth IRA will be tax free when you retire, the traditional will probably not be, depending on your income at that time.

Answer 2

For a ROTH, you don't get a deduction up front for your contribution - under most circumstances you do for a traditional IRA.

When you take withdrawals after you're retired from a traditional IRA, you'll pay taxes on them, both on the original contribution and on any growth - for a ROTH you won't.

Your choice is pay the taxes now, or later.

Answer 3

That depends on your tax rate, and also how much can you grow your $1K. Because you don't get taxed on traditional IRA now, you are getting taxed based on your current tax rate. When you retire, and take the money out, you get taxed on that money and whatever you grow from it at a lower tax rate since when you retire, you make less money in general. However the idea behind Roth IRA is you pay taxes on it now at your current tax rate, but if you double or triple your money due to a great investment strategy, then none of your capital gain or principle will be taxed when you withdraw it once you retire.