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Still time to make your 2017 Retirement Plan Contributions

| April 10, 2018
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Deadline for 2017 Retirement Contributions approaches

Next Monday April 16th is the deadline for making your 2017 IRA / SEP / Roth contributions.  If you haven't yet gotten around to it, consider making a contribution this week.  

Who can benefit and what IS the benefit?  

Regular tax deductible IRA contributions are normally deductible from income.  That's a great thing if you are in the 25% tax bracket and make a 6500 contribution, the government gives you back $1625,  And your contribution can grow tax free until you take money out in retirement.  WHO can make a contribution?

  1. If you are NOT covered by an employer retirement plan (401k / pension etc) but DO have income from work, then you can make a contribution of $5500 ($6500 if you are over 50).  
  2. If you ARE covered by an employer plan BUT YOUR SPOUSE ISN'T - then he/she can make a contribution, as long as he/she had income from work. 
  3. If you ARE covered by an employer plan you can ALSO contribute to an IRA if your income is below certain limits.  
  4. If your spouse does NOT have income from work - but YOU do - then he/she can make a spousal contribution based on YOUR income - but only if your income is less than certain limits.  
  5. ANYONE can make a contribution of AFTER TAX money to an IRA.  You don't get a deduction, but the money can grow tax deferred. 

ROTH contributions are a little different.  

You and/or your spouse can make contributions to a Roth IRA so long as your income (for 2017) is less than $133000 for singles or $196000 for couples.  You won't get a deduction, but the money can grow tax free AND ALL YOUR WITHDRAWALS IN RETIREMENT WILL ALSO BE TAX FREE!  

As with a regular IRA, you can only make a Roth contribution if you have income from work.  

What about a SEP IRA?

A SEP IRA is a special IRA for business owners - usually utilized by the self employed.  The great thing about SEP IRA's is that the income limits are much higher than regular IRA's.  If you own a business, you may be able to contribute up to 20% of your income (profits) to a SEP.  This is a great retirement tool every self employed individual or contractor should be taking advantage of!  

So don't let the tax year slip away!  Make you retirement plan contribution today. 

If you are stuck and not sure what kind of retirement plan is best for you, give us a call, perhaps we can help.  

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