Retirement Contribution Options

Retirement Contribution Options

Most of the money-saving options available to potentially lower tax bills must happen by December 31st of each year. However, there are still a few things you can do to make this tax filing season cheaper and easier such as retirement contributions. If you didn’t make all the right changes by December 31st, 2016 there may still be time for you to potentially save thousands of dollars using the retirement contribution option right for you.

 

Making deductible contributions to your retirement accounts may help lower your tax bill. Deadlines for contributions may differ by retirement account type.

  • Funding a retirement account for 2016 for both Traditional and Roth IRA’s fund are required to be funded by April 17, 2017.
  • Keogh and SPA’s will receive filing extensions until October 16, 2017.

Although you can wait up until those dates to fund your retirement accounts, it is recommended to begin funding these accounts immediately to begin free compounding as soon as possible.

To know if you are eligible for a full annual IRA deduction in 2016, you must:

  • not be eligible to participate in a company retirement plan, or
  • have an adjusted gross income of $61,000 or less for singles, or $98,000 or less for married couples filing jointly.

The maximum IRA contributions you can make for 2016 are:

  • $5,500 ($6,500 if you are age 50 or older by the end of the year), or
  • if you are a person who is self-employed, the maximum annual addition to SEPs and Keoghs for 2016 is $53,000.

You can plan ahead and read more about the contribution for 2017 here in an article shared in Forbes.

If you need more assistance with understanding all the different types of retirement plans and accounts available, review the official list recognized by the IRS here.

To potentially avoid penalties or a larger than expected tax bill, book your appointment online, so we can uncover all of the potential savings you can earn in this tax season.

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Written by Desnoyers CPA

Desnoyers CPA

Known for her friendly, outgoing nature and her rare talent for financial foresight, Lydia Desnoyers has been serving individuals and small businesses in Florida since 2010. After earning her Master’s Degree in Accounting from Nova Southeastern University and her Bachelor’s Degree in Accounting from Florida State University, she became a Certified Public Accountant and a Certified Fraud Examiner.