Can a nondeductible IRA increase your refund?

[anita1]

I have wage earners with taxable income at $767K both in a retirement account. Husband is self employed. He was advised to make a $7000 nondeductible IRA . When I place it in the software . The software classified it correctly as nondeductible the basis is calculated and place on form 8606 as $7000. This looks correct. But the refund goes up 37%. If it is nondeductible why is the refund going up?

[Just-Lisa-Now-]

Print out the return before the contribution and after, don't just look at the refund, compare them line for line...what else changes?

As tax professionals, we HAVE to be able to dissect the return and understand the mechanics to see why things do what they do.

[rbynaker]

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@Just-Lisa-Now- wrote:

Print out the return before the contribution and after, don't just look at the refund, compare them line for line...what else changes?

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^^ This ^^

My crystal ball says you'll be spending most of your time reviewing Form 8606.