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10 Last-Minute IRA Tips for Tax Season

John-Rothans

Written by John Rothans

Mar 21, 2018

Your window for IRA contributions doesn't close until this year's tax filing deadline, which is April 17, 2018. That means you may still have time to improve your tax situation and cut your tax bill. Just follow our quick list of last-minute tax tips to find out how contributing to the right Self-Directed IRA could reduce your tax liability and fortify your retirement plans.

1. Consider contributing to multiple retirement accounts.

The IRS does not limit you to holding one type of retirement account. You can contribute to multiple retirement accounts (up to a certain amount) and they can work in parallel to secure your retirement dreams.

2. Open an IRA before this year's tax filing deadline.

Not all retirement accounts help reduce your taxable liability by reducing your tax bracket. A Traditional IRA could, however, and you have the freedom to open a Traditional IRA before this year’s tax filing deadline on April 17, 2018, for the year 2017. Per the IRS, Traditional IRAs must be established by the tax filing deadline (without extensions) for the tax year in which your qualifying contributions will apply.

“In addition to providing a current tax deduction,” says CPA Jeff Gonzalez via TurboTax, “an IRA defers taxes on earnings and contributions until distribution,” which can be a great way to save for retirement.

3. Contribute up to $5,500 or $6,500 to your IRA, depending on your age.

If you’re under age 50, the total you can contribute to all of your IRAs cannot be more than $5,500. If you’re over age 50, you can contribute up to $6,500. Keep in mind that a little savings can go a long way, even if you don't reach your maximum contribution.

“A worker in the 25 percent tax bracket who maxes out his IRA could reduce his tax bill by $1,375,” calculates U.S. News & World Report. “Even a $500 contribution would reduce your tax bill by $125 if you are in the 25 percent tax bracket.”

4. Specify how you want your contribution applied.

Keep an eye on the calendar and remember to specify the tax-year you want your contribution applied to.

“If you want to apply it as your 2017 contribution, you have to tell the custodian or trustee, otherwise it is going to be applied as the 2018 contribution, ” says Barbara Weltman, author of J.K. Lasser’s 1001 Deductions and Tax Breaks 2018: Your Complete Guide to Everything Deductible.

5. Consider a spousal IRA.

Contributing to a spousal IRA for a non-working spouse can be a great way to increase your savings and lower your tax bill (if you and your spouse are eligible). One spouse must have earned income in order to contribute to a spousal IRA. Contribution limits for spousal IRAs are the same limits as for Traditional and Roth IRAs.

6. Check your eligibility for a saver's credit.

If you save in an IRA and you have a 2017 adjusted gross income of less than $31,000 as an individual, $46,500 as head of household, or $62,000 as a married couple filing jointly, you might be eligible for the saver's credit. Per the IRS, the amount of this credit is 50, 20, or 10 percent of your retirement plan or IRA contributions up to $2,000 ($4,000 if married filing jointly).

7. Use your tax refund to fund your IRA.

Don't have funds on-hand to contribute any more to an IRA this year? IRS form 8888 allows you to directly deposit part or all of your tax refund in an IRA, says U.S. News & World Report.

As long as you make the contribution by April 17, 2018, you can file a tax return claiming a tax deduction for an IRA deposit before the money is in the account. This credit is worth between 10 and 50 percent of your IRA contribution up to a certain amount. The saver's credit can be claimed in addition to the tax deduction for contributing to a retirement account.

8. If you need more time to file, ask.

Already know you're going to need some extra time to get your records in order or contact your IRA provider? Avoid a late-filing penalty by requesting a tax-filing extension. You can do this through Free File on IRS.gov or filling out Form 4868.

9. Strengthen your IRA with gold and silver.

A Self-Directed IRA, whether set up as Traditional or Roth IRA, is unique in that it allows you to hold alternative assets, including physical gold and silver. IRA-approved gold and silver can help you achieve a level of diversification that brings you peace of mind, along with the tax benefits of a 401(k) or another retirement account. If your long-term goal is to create lasting wealth in a safe, convenient, and tax-advantaged way, then it's time to explore holding precious metals in your retirement account.

10. Turn to U.S. Money Reserve for help.

Time is ticking. We can help you understand how a Self-Directed IRA, strengthened by the power of precious metals, can factor into today's taxes and tomorrow's retirement plans. Now is the time to request U.S. Money Reserve’s exclusive Precious Metals IRA Kit. Learn more about Self-Directed Precious Metals IRAs and unlock the information you need to secure your retirement! Call 1-844-307-1589 to speak with a dedicated IRA Account Executive today.

Gold Standard Precious Metals IRA Seal

 

Complete your IRA education with a free Precious Metals IRA Information Kit, courtesy of U.S. Money Reserve’s Gold Standard Precious Metals IRA program. Sign up and see how precious metals can help set you up with a stronger, more secure retirement.

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