If I contribute enough of my pre-tax simple IRA, will that put me in a lower tax bracket? Or does the tax bracket stay the same no matter what I contribute.
no, it could lower your tax bracket and make a significant difference in the amount of taxes you pay NOW remember, it's a pay me now or pay me later thing.
It depends. If your are close to the bracket line it could put you in a lower bracket. The best way to know is to figure your taxes both ways. It is very unlikely you will drop, but it is possible.
Yes, it can put you in a lower tax bracket. But going to a lower tax bracket doesn't mean that all of your income is all of a sudden taxed at a lower tax rate. We have a graduated tax systemdifferent portions of your taxable income are taxed at different rates. As a matter of fact, you get the greatest impact on your taxes if your IRA contribution DOESN'T put you into a lower bracket. Because the the portion of the deduction that overlaps into the next bracket down only saves you taxes at the tax rate in the next bracket down. Hope that helps
