There’s Still Time to Cut Your 2016 Tax Bill
![shutterstock_478129582-[Converted]](https://groco.com/wp-content/uploads/2021/02/shutterstock_478129582-Converted.png "shutterstock_478129582-[Converted]")
So with tax season officially kicking off next week, as the IRS will begin receiving returns on January 23rd, it would seem that the time to save money on your 2016 taxes is now gone. However, there is still a nice tax break available for this year all the way up till April 18th (the tax filing deadline for 2017). You can still use your contributions to a traditional IRA as a deduction on your 2016 tax return.
In fact, you can even contribute as much as $5,000 for both the 2016 and 2017 tax years; and if you’re older than 50 you can also contribute an extra $1,000 for each year as a catch-up contribution. While you can also do the same for a Roth IRA those contributions are not eligible for a tax deduction. Also, keep in mind that this limit applies to all your IRA accounts. You cannot contribute $5,000 to each, but rather $5,000 collectively.
This is a great way for just about anyone to lower their tax bill, including investors that don’t currently have an IRA set up. The savings can be significant. For example, if you contribute the maximum of $5,500 (for taxpayers under 50 years of age who fall in the 25 percent tax bracket) you would save $1,375 on your tax bill for 2016.
The good news doesn’t end there, because, of course, in addition to the nice tax savings you will also be creating a nice retirement fund for those golden years, which is another a great reason to open and contribute to an IRA. If you need help with this tax-saving idea then contact us today.
http://host.madison.com/business/investment/markets-and-stocks/you-could-still-lower-your-taxes—-here/article_8ba9e540-1177-5ba8-9230-c03650001cef.html
Building an Estate Planning Team
Building an Estate Planning Team To create an estate plan that serves your unique needs and that will execute your wishes as to the distribution of your assets is an important and, often, a complex task. Such professionals usually have honed their skills in their own specific fields. Sound estate planning is built upon a…
Investors: A Growing Taste For Exotic Fare
Investors: A Growing Taste For Exotic Fare Even conservative investors are tempted by the returns of emerging-market funds For many managers of emerging-market funds, the biggest problem these days is that folks just love them too much. It used to be that buying stocks in Turkey and picking up distressed debt in Argentina was for…
When it Comes to Payroll Taxes, Don’t Mess With the IRS
When it Comes to Payroll Taxes, Don’t Mess With the IRS It’s payday! Everybody loves payday, except for the company making all those payments. It’s not that companies don’t want to pay their employees; rather it’s the high cost of payroll taxes that comes with having those employees. However, that’s the law, so if your…
Ten Facts about Capital Gains and Losses
Ten Facts about Capital Gains and Losses Source: IRS.gov The term “capital asset” for tax purposes applies to almost everything you own and use for personal or investment purposes. A capital gain or loss occurs when you sell a capital asset. Here are 10 facts from the IRS on capital gains and losses: Almost everything…