By Zina Kumok
Investing in a retirement account is arguably one of the smartest ways you can use your money. And while it’s quite admirable to put that tax return money into an IRA, people who wait to contribute to their IRA until after tax day could be potentially missing out on the benefits of contributing before they file for taxes this year. Here are some ways to make the most of your money when tax season rolls around.
- Put money into a traditional IRA: If you contribute to your IRA before April 18, you can claim it as a contribution for the previous year. For example, if you put money in your IRA before April 18 of this year, you can deduct the contribution on your 2015 taxes. This only applies to traditional IRAs; you can’t claim Roth IRA contributions.
- See if you qualify for the Saver’s Tax Credit: If your income falls between certain limits, you might qualify for a credit on your traditional or Roth IRA contributions. The full list of income limits is available at the IRS website. In general, married couples filing jointly should earn less than $61,000, a person filing as head of household cannot earn more than $46,125, and other filers cannot earn more than $20,001-$30,750.
- Keep track of your receipts: There’s no form required for submitting IRA contributions on your tax return. That means you have to count your contributions manually. Check the statements on your IRA accounts to see how much you’ve given since January 1, 2015 and use that figure for your taxes.
- Know your limits: If you or your spouse don’t have access to a workplace retirement plan, you can deduct your entire IRA contribution. If you are covered by an employer-sponsored plan, you’ll have to check if your income qualifies for a deduction. If you’re married and have a spouse with a retirement plan at work, you may not be able to deduct your contributions—even if your company doesn’t sponsor a plan.
About the Author
Zina Kumok is a writer for TraditionalIRA.com and RothIRA.com specializing in personal finance. She started covering personal finance while blogging about paying off $28,000 worth of student loans in three years. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, Daily Worth and Time magazines.