<p>I applied the 2011 payroll tax rate of 4.2%.
<a href=“http://www.nytimes.com/2010/12/25/your-money/25money.html[/url]”>http://www.nytimes.com/2010/12/25/your-money/25money.html</a></p>
<p>Contributing to the IRA reduces your taxes but increases your loans; not sure exactly how the interest balances out. I certainly contributed the full $5,000.</p>