2 Pronged Tax Benefits

You MAY still be able to get some money back on your taxes for 2014!

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 Deadline

Did you know the deadline for qualifying retirement contributions for 2014 is April 15th 2015? That’s right! You still have a little over 2 months to contribute to your IRA and count it towards last 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.

SHOWHIDE Comments (2)
  1. Hi Pia – Thanks for your question. Yes, the extended window applies to Roth contributions as well as long as the Roth account was set up during the full tax year. For ex. You can make 2014 Roth contributions up until April 15th 2015 as long as the Roth was created before Dec 31st 2014. When making the contribution, remember to tell the person/system helping you which year you’d like the contribution to count towards.