Buzz
If you've been putting it off, here’s your final reminder: If you’ve got an Individual Retirement Account and want to lower your taxes, make sure to contribute by tomorrow, April 18th.
With a traditional IRA (as opposed to a Roth IRA), you can deduct your contributions from your taxable income for the year. The IRS allows deductible IRA contributions until Tax Day, which this year falls on April 18, 2017. If you’ve been meaning to save for retirement, now's the time to act. Not everyone can do this, but if you’re able, it’s a smart move.
This is assuming you haven't hit your contribution limits for 2016. Generally, the contribution limits for 2015, 2016, and 2017 are as follows:
$5,500
($6,500 if you're 50 or older), or
If your taxable compensation for the year was less than this limit, you're eligible.
Eligibility is important here. There are income limits that impact your ability to deduct contributions. If you exceed these limits, your tax-deferred benefits may be reduced or eliminated entirely. You can check out the income limits here, but generally, you won’t be able to deduct contributions if:
If you’re married and filing jointly with a modified adjusted gross income of $118,000 or more.
If you’re single and your modified adjusted gross income reaches $71,000 or more.
We're down to the final moments. This deduction needs to be made now, and if you’re transferring money from a bank, allow a couple of days for processing. To make sure your contribution applies, contact your financial institution. I spoke with Fidelity, and they confirmed that as long as the transfer is initiated by 11:59 p.m. EST tomorrow, it will count for 2016. Alternatively, you can mail a check postmarked by April 18, 2017, noting that it’s for a 2016 contribution.
