You MAY still be able to get some money back on your taxes!
We are always looking for ways to keep our money out of the hands of Uncle Sam. So don’t procrastinate any longer and put some money back in your pockets! It’s simple, fully fund your IRA.
The IRA Contribution Deadline
Did you know the deadline for qualifying retirement contributions is April 15th? That’s right! You have a little over 3 months to contribute to your IRA and count it towards the previous year.
Don’t have an IRA? – call us – we can set it up for you fast (and it’s free!). If you have one, great, you’re ahead of the curve.
Roth vs. Traditional
There is a lot of talk about ROTH IRA vs a Traditional IRA. Let’s simplify it. ROTH = pay taxes now.
Traditional = pay taxes later.
A Traditional IRA, like a 401(k) or 403(b), can help us at tax time.
The 2-Pronged Benefit
Let’s say you’re using Turbo Tax and it says you owe money to your State and the Federal Government. You can likely decrease the amount you owe. Regardless of if you contribute to a retirement plan at work, many of us (depending on income levels) are allowed by the government to tax deductible contribution to our Individual IRA of an amount up to $5,500 and then deduct that amount from our MAGI.
If you are married filing jointly and you both have an Employer Plan at work, you can deduct the max contribution of $5,500 as long as your joint income is under $95,999. But if only one of you is covered by an Employer Plan, you can deduct the max contribution as long as your income is under $181,000. By contributing the maximum amount of $5,500 your are able to lower your reportable taxable income for 2014 by this same amount ($5,500). This in the end not only prevents you from owing more tax dollars to the State & Federal Government but you’ll actually get a few hundred dollars back in your pocket! Not to mention, you’re saving for retirement.
For those of you who fall within the income limits, contributing to a Traditional IRA might help you get a few hundred dollars back this tax season. Sounds smart to us.