1. File now and fund later: Frequently, during tax season we are asked if an IRA contribution must be made before the tax return is filed. The answer is no. This is not required. You can claim a deduction for your IRA contribution now when you file your taxes and fund it later. Some people even fund their IRA contribution with their tax refund if the timing is right. Just don’t wait too long. If you claim the contribution, be sure you get it done.
2. Tax credits are available: Many people are unaware of the Saver's Credit. The is a tax credit that is available to lower income workers who make IRA contributions. It is a double tax break because it is available in addition to any deduction that you may have already been received for your IRA contribution. The maximum contribution amount eligible for the credit is $2,000. Since the maximum credit rate is 50%, you can potentially reduce tax liability by up to $1,000.
3. Spousal contributions can help stay-at-home spouses: Being a stay-at-home spouse does not completely count you out when it comes to IRA contributions. If your spouse has taxable compensation, you can make a spousal contribution to your IRA based on your spouse’s taxable compensation. You can build your retirement savings as a stay-at-home spouse.
4. No age limits for Roth IRA contributions: Think you are too old to contribute to an IRA? Not necessarily. While contributions are not permitted to a traditional IRA once you reach the year you attain age 70 1/2, a Roth IRA is a different story. There are no age limits for Roth IRA contributions. You can be any age and make contributions. This could be helpful for retirees who work part-time and do not need the income. Why not make a Roth contribution now for future retirement needs?
5. No extensions for IRA contributions: You may be able to get more time to file your taxes but that will not help you with your IRA contribution. The deadline for making your 2018 traditional or Roth IRA contribution is April 15, 2019. This is true even if you have an extension of time to file your taxes.
I am an Ed Slott Master Elite trained IRA Specialist and I would like to help you. If you have any questions regarding this article or would like to schedule a complimentary consultation please call my office at 845-627-8300. My Client Service Coordinator Susan will be happy to set up a convenient time so I can help.
Beth Blecker CEO
“Ed Slott’s Elite IRA Advisor Group” is solely an indication that the financial advisor has attended training provided by Ed Slott and Company. Ed Slott is not affiliated with Royal Alliance Associates, Inc. Securities and advisory services offered through Royal Alliance Associates, Inc. Member FINRA/SIPC. Additional advisory and financial planning offered through Affiliated Advisors, Inc. Insurance services offered through Eastern Planning Inc. Listed entities not affiliated with Royal Alliance.
Reprinted from The Slott Report, 3/13/2019, with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Copyright © 2018 Ed Slott and Company, LLC