Hi,
In the past week I've read and browsed through a couple tax publications and forms, and have learned a lot. However, I have a question about IRA deductions and credits.
My AGI (not counting IRA deductions) for 2005 will probably be just BARELY over the $25,000 limit for obtaining an IRA credit with a form
8880.
My question is: can I open a small traditional IRA to lower my AGI with a deduction, then use my maxed-out Roth IRA to claim the tax credit? Since the tax credit is limited to $2000 I was thinking of contributing $2k to the Roth and then whatever I needed in the traditional to keep it below the $25,000 AGI threshold for the credit.
Sneaky...but legal? After all, its not a double-benefit, since one IRA is deducted, while the other is credited.
Thanks for any ideas, Dan