While tax filing season is fast coming to a conclusion, it’s not too late to make tax deductible retirement contributions which will be deductible on your personal and business tax returns. You should review the due dates for making retirement contributions, as well as consider extending deadlines to set up retirement plans and make additional contributions.
Personal IRA Contribution
It’s important to familiarize yourself with the IRS regulations regarding your IRA contributions, so you can make the most of tax deductions and maximum annual limits. For 2015, 2016, and 2017, your total contributions cannot exceed $5,500, or $6,500 if you’re 50 years of age or older. However, exceptions such as rollover contributions and qualified reservist repayments can enable you to expand your IRA more quickly.
You can open an IRA account and make contributions to your IRA until April 15th, giving you time to reach that upper limit before filing your tax return for last year. Contributing the maximum allotted amount is a valuable method for both retirement planning and efficient financial management.
Business Retirement Plans
Not only can you continue providing retirement contributions to your personal IRA, but options for setting up and contributing to SEP and 401K plans exist well into 2017. For small business owners and self-employed individuals, the Simplified Employee Pension (SEP) offers a tax deductible retirement plan that you can continue to subsidize until you file your business tax return – this year, that allows you up to the extended date of September 15th. While a 401K Plan must be set up by December 31st, this plan also allows tax deductible benefits, and you can continue to make employer contributions to your existing plan until you file your business tax return.
Whether you’re focusing on personal or business finances, maximizing your contributions to your retirement plan is a valuable way to expand your savings and maximize tax deductions. Make sure to include your retirement contribution details when filing last year’s taxes, and make the best of the extended deadlines for making contributions to your retirement plans.
For more information concerning retirement plans and tax planning, contact Atlanta-based Certified Public Accountants Fricke & Associates, P.C.