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DON'T FORGET THE TRADITIONAL IRA!
April 05, 2007
The Individual Retirement account is one of the easiest tax breaks to use, yet it is one of the most under-used tax tools. When Congress restricted the IRA deduction in 1986, many people just stopped paying attention. That's a bad idea. There's been a lot of new tax law since then, and an IRA contribution might be just the thing to make this year's tax filing more pleasant.
For yourself, you can always deduct an IRA contribution if your adjusted gross income is below $75,000 filing a joint return, $50,000 for a single return, or $10,000 if you are married filing separately. If you and your spouse aren't covered by any employer retirement plan, you can make a deductible IRA contribution regardless of your income. If you are covered but your spouse isn't, you can make a deductible contribution to the spouse's plan if your combined AGI is under $150,000. Full details of these limits can be found here.
The maximum 2006 IRA contribution per individual is $4,000, or $5,000 if you were 50 years old by the end of 2006. Remember, you have until April 17 to fund an IRA for 2006, so you still might be able to buy a deduction.
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Comments
When it comes to retirement I'm an idiot. I get the feeling my wife and I are going to be so in debt. Especially because I won't have health insurance when I retire. Do I need to employ you? My attorney makes no mention of retirement for my wife and I, but he does my taxes, and is well aware of our financial situation. I get the feeling he doesn't make suggestions because he wants to be paid.
Posted by: Brent | April 5, 2007 9:05 PM
You don't need to employ me. Your comment does call for a longer response, though, which I will try to post tomorrow. Have a great Easter!
Posted by: Joe Kristan | April 6, 2007 10:31 AM