Retirement Plan Tricks or TreatsOctober 01, 2017
While many are anticipating the upcoming tax reform proposals to have a major impact on our tax structure, it could have some serious ramifications on our 401(k) and/ or other retirement plan strategies as well. As we prepare for “the biggest tax event in the history of our country”, there are still other ways to boost your retirement and yet a few things you can get in order prior to the proposed changes taking place.
- Maximize the tax deduction. You can contribute up to $5,500 (and $6,500 for workers age 50 and older). The income will not be taxed until money is withdrawn.
- Contribution Deadline. 2017 IRA Contributions are due by the filing deadline of April 17, 2018 (no extension). When preparing your tax return, you can figure out how the contribution can lower your tax liability or boost your refund. Be mindful, if you are making the contribution in the following year, January thru April, you must specify which year to apply your contribution
- Contribution for Non-Working Spouses. The working spouse can contribute to an account in the non-working spouse’s name up to $5,500 ($6,500 age 50 and older) if the couple files a joint return, and the working spouse has earned income that equals/ exceeds the nonworking spouse contribution and the working spouse’s contribution.
- Direct Deposit your refund into IRA. You can deposit part or all your refund into IRA using form 8888
- Qualification. You must be younger than 70 ½ to participate. If your employer has a 401K plan or a similar retirement account, the tax deduction is phased out for individuals earning $62,000 and $72,000 and couples earning $99,000 to $119,000.