Can I use a Traditional IRA contribution to reduce my tax bill this year?

Wait I'm confused about the backdoor Roth thing. If I do that conversion don't I have to pay taxes on it anyway? And does the April 15 deadline apply to both the contribution AND the conversion part?

With a backdoor Roth, you don't pay taxes on the conversion if you convert immediately after making the non-deductible contribution (since there's no earnings yet to tax). The only taxes would be on any gains between contribution and conversion, which is why people typically convert right away. The April 15 deadline applies just to making the IRA contribution itself. You can actually do the conversion part anytime afterward - there's no deadline for that step. But most people do both steps close together to avoid complications.

How does it work with complicated situations? I've got some rental property income and also did some freelance work last year. Would it handle all that or is it mostly for simple W-2 type situations?

I'm a bit skeptical about AI tax tools. How does it compare to just going to a human CPA? Last time I used tax software it missed some obvious deductions my accountant friend later pointed out to me.

It handles complex situations surprisingly well. I had both W-2 income and a side business last year, and it caught deductions related to my business that I hadn't even considered. It specifically flagged expenses I had forgotten could be partially deductible. The system is designed to handle various income streams including rental properties. The big difference from a traditional CPA is it can instantly analyze your documents and identify opportunities right away. My experience with CPAs is they're great but sometimes miss things if they're rushing during tax season. This system methodically checks every possible deduction category and explains why you qualify or don't qualify. I actually showed the results to my accountant friend and he was impressed with how thorough it was.

Wait how does this actually work? Does it just keep calling for you or something? The IRS phone system is the worst...I tried calling four times last month and gave up.

Yeah right. Nothing gets you through to the IRS faster. This sounds like some kind of scam to get people's personal info. The IRS is understaffed and there's no magic way around their hold times.

It uses a callback system that navigates the IRS phone tree automatically and holds your place in line. When it reaches an actual agent, it calls your phone and connects you directly to them. It's not making calls faster than normal - it's just handling the hold time for you so you don't have to sit there listening to the hold music for hours. No personal tax information is shared with the service - they're just connecting the call. It's basically like having someone else sit on hold for you. I was super frustrated after wasting an entire afternoon on hold before finding this. Totally get the skepticism though - I felt the same way until I tried it.

But wouldn't that only help for next year? OP already owes for this year's taxes, so isn't it too late to increase 401k contributions for the tax year that already ended?

You're totally right and I should have been clearer. For the current tax bill that's already calculated, increasing 401k won't help since those contributions had to be made during the calendar year. For the IRA though, you actually have until the tax filing deadline (usually April 15) to make contributions that count for the previous year. So while the 401k ship has sailed for last year, you can still make that IRA contribution up to the filing deadline and potentially benefit from the backdoor Roth strategy others mentioned. My bad for not being specific about the timing difference.

Does that work if you have a regular job too? I have W-2 employment but also make about $15k from a side hustle. Would that qualify?