Smart tax planning is a year-long process. The moves made today are meaningful in many ways to save you money and make your tax filing process easier.
- Maximize your retirement accounts
If you contribute to an IRA, you actually have until the April 15th tax deadline to make your contributions for the 2016 tax year. If you maxed out your contributions on the other hand….congratulations! You have time to plan for your 2017 contributions.
For both the 2016 and 2017 tax years, the maximum allowable contribution to a Roth or traditional IRA is $5,500, with an additional $1,000 catch-up contribution allowed if you’re over age 50.If you plan out 2017 contributions, the maximum contribution translates to $458.33 per month ($514.66 if you’re over 50) spread out over an entire year.
If you have self-employment income, then you could be eligible for additional types of retirement savings, such as a SIMPLE IRA, SEP-IRA or Solo 401(k), all of which have significantly higher contribution limits than standard IRAs.In case you haven’t started investing in an IRA yet, or have questions about what to do with your money after you contribute, then check with Bruce, Larry or Gary with a quick note to https://claytonpaulk.com/contact-us/.
If you’re over age 70½, make sure you have a plan in place to withdrawn enough in 2017. Ideally, you should have a trusted person who can also assist with a backup plan to insure you take the required minimum distributions (RMDs) from your pre-tax retirement accounts, traditional IRAs and most 401(k) and similar retirement accounts.
You don’t need to take it all at once, but make sure you’ve taken enough by the end of the year, as the penalty of 50% of the amount you didn’t withdraw. As always, contact us https://claytonpaulk.com/contact-us/ for assistance.
- Get your paperwork together
As a final tip, be sure to continually organize your paperwork during the year by making separate folders for each type of documentation. For current clients, January 13th you should have received your 2016 Organizer from Elizabeth Clayton. If not, please contact the office at 770.414.5770.
There are many lucrative tax breaks, but you’d better be able to back them up if you’re asked to do so.