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Your income is $10,000 over the cutoff for the next lowest tax bracket. Your average tax rate is 10%. Your marginal tax rate is 25%.

Your income is $10,000 over the cutoff for the next lowest tax bracket. Your average tax rate is 10%. Your marginal tax rate is 25%. You contribute $3,000 to a traditional IRA and your contribution is fully deductible, should you decide to go that way. You decide, in fact, to make this a traditional IRA. How much did your contribution actually cost you, in after-tax dollars?

$2250

$2700

$750

$3000

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