IRA contribution to offset 2020 tax liability

[TaxTrooper]

The clients are MFJ with tax due of $1,750 approx. Taxpayer has Roth IRA ($4,250 for 2020) through employer and does not utilize an HSA account, so I don't find any relief there. Spouse can put $5000 into her Traditional IRA (not covered thru employer). I completed an 8606 for her and the resulting tax now due is $765.

I also modified the amounts if spouse contributes $4,000 - $3,000 - $2,000 and respectively the amount due became $855, $1,060 & $1,283. The odd thing is that the $3,000 contribution created
a tax penalty of $2 ??

Any input on other tax redux. for them? (no other dependents)

Thank you.

[Lion]

Can she contribute $6,000/$7,000? Can he deduct any IRA contribution at his income level? Did they have unemployment benefits to exclude? PTC to exclude? Any side gigs where you're depreciating equipment and can vary income by type of depreciation? If their income is mostly W-2, not a lot you can do after the year ends. Remind them to call you in the fall for some year-end tax planning. For instance, if he'd maxed out his traditional 401(k) he'd have less taxable income, and she might've been able to contribute more to her Traditional IRA.

[TaxTrooper]

Thanks for your insight - great questions, yes they are both W-2 with no other income sources outside of a few investments. No 1099G, PTC either. Taxpayer has designated Roth from employer.
Only available options still seem to be maxing HSA to $7,100 for TP and maxing IRA (presuming not Roth) for TP Spouse.
I understand the additional HSA (if employer plan agrees) can be reported on form 8889 - this may be easiest option.
I'm not clear where to report additional IRA contribution (traditional) - was using the 8606, which is really for non-dedux. contributions. Then the following contributions & distributions have to be tracked - for a liability of $1,700 not sure it's worth it to them?

[Lion]

If she makes a nondeductible Traditional IRA contribution, Form 8606 tracks her basis, but that isn't going to lower their balance due. If she makes a Traditional IRA contribution that's deductible, you enter it where ever you enter IRA contributions. Your software must have a screen for that.

[TaxTrooper]

Thanks for the reference 2020 Instruction 1040 (irs.gov) pg. 90 speaks to the IRA dedux. and in this case there are 10 points to cover before using the worksheet that flows to Line 19 - Sch 1 for an IRA deduction. Next I had to refer to Pub 590-a because per the instructions, the deductibility depends if the spouse was under a covered plan. There are two tables that break it out based on filing status & AGI and whether one of the couples was covered by a qualified plan at work or if they weren't.
Yep' glad it's Friday