Tax time is a great time to do a little retirement planning. Even if you already have a retirement plan set up, you can give that plan a boost at tax time. The problem is, many taxpayers aren’t aware of the savvy tax moves that will help with both retirement and save money on taxes.
So let’s a look at a few of the simple moves you can still make this tax season to save you some money. Open an IRA. Did you know that you could open an IRA before the tax deadline even if it’s after the end of the taxable year?
This not only puts money aside for retirement, but it reduces your adjusted gross income, thus lowering your tax bill. If you can afford it, then open a Roth IRA with after-tax money, which grows tax-free. If you can’t then got with a traditional IRA.
Another way to save is by opening a health savings account. You can make tax-deductible contributions to an HSA until the tax deadline. You can also make payroll contributions to your HSA, as well. This is a great way to save for medical expenses in retirement and lower your tax bill. In fact, it’s a lot like a 401k for your health care.
If you work for yourself, or earn a little extra cash froma side job,then you can open a SEP-IRA. And you actually have until October 15 to contribute to a SEP. Plus, you can stow away up to 20 percent of your self-employed income in a SEP, even if already you have a 401k from your full-time job.