We Made $280K But Paid $82K In Taxes. Our CPA Says We Could Have Kept It in Our Own IRA Instead

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Ivy Grace

Tue, September 22, 2026 at 6:45 PM GMT+3 6 min read

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Making $280,000 sounds like a pretty good year.

For one self-employed couple, however, the celebration came with an $82,000 tax bill. Then their CPA told them there may have been another way to handle some of that money: Put more of it toward their own retirement instead.

That raises a question plenty of self-employed Americans might ask after seeing their own tax bill: Could they really have sent that money to an IRA instead?

Not exactly. But there is a legitimate tax-planning strategy behind the idea.

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The IRA Isn't A Tax-Bill Eraser

A regular IRA has annual contribution limits. For 2026, the limit is $7,500 per person, or $8,600 for those 50 and older. So a married couple couldn't simply take $82,000 that would otherwise go to the IRS and dump it into two traditional IRAs.

Self-employed workers, however, have access to retirement plans with much higher contribution limits.

A SEP-IRA, for example, can allow eligible self-employed individuals to contribute up to the lesser of 25% of compensation or $72,000 in 2026, subject to the IRS's calculation rules. A one-participant 401(k) can also allow much larger contributions than a traditional IRA, depending on the business owner's circumstances.

That's likely where the couple's CPA was going with the advice.

The key isn't that an IRA magically turns a tax bill into retirement savings. It's that contributions to the right retirement plan can potentially reduce taxable income, allowing a self-employed person to put more money toward retirement while potentially lowering the amount of income subject to current tax.

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There are plenty of rules. The amount a self-employed person can contribute depends on factors including business structure and net earnings, and whether a contribution is deductible depends on the account and the taxpayer's circumstances.

Where A Self-Directed IRA Fits

There's another reason the retirement-account conversation gets interesting.

A self-directed IRA can allow investors to hold certain alternative assets inside a retirement account, including real estate and private investments, subject to IRS rules.

That's where Advanta IRA comes in. The company provides self-directed IRA custody services for investors who want to use retirement accounts for alternative assets. The account doesn't create extra contribution room or magically eliminate taxes. Instead, it can give investors more control over how eligible retirement dollars are invested.

For the couple, then, the real question isn't whether they could have handed the IRS an IRA instead of an $82,000 check.

They couldn't.

The more interesting question is whether they had an opportunity to legally move more of their self-employed income into a tax-advantaged retirement plan before the tax bill was calculated.

If they did, their CPA may have identified a retirement-planning opportunity they wish they'd known about sooner.

For anyone who's self-employed, that may be the bigger lesson — the best time to think about the tax bill is often long before it arrives.

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This article We Made $280K But Paid $82K In Taxes. Our CPA Says We Could Have Kept It in Our Own IRA Instead originally appeared on Benzinga.com