Check my math, please - IRA vs. 529

privateID
Fri, 16 Mar 2018 16:13:01 +0000

^ Yes, you get a federal tax savings. But if you sell the IRA two years later, it gets added to taxes that year. You are talking about a break on taxes one year and larger taxes two years later.

You could argue, with the recent tax cuts for 2018 and going forward, that assuming the OPs income doesn’t change, he will be in a lower tax bracket in 2 years, so that favors the trad’l IRA.

With a state tax deduction, I personally would just do the 529.