IRAs and retirement plans Make sure that youre taking full advantage of tax-advantaged retirement savings vehicles. Traditional IRAs and employer-sponsored retirement plans such as 401(k) plans allow you to contribute funds on a deductible (if you qualify) or pretax basis, reducing your 2014 taxable income. Contributions to a Roth IRA (assuming you meet the income requirements) or a Roth 401(k) arent deductible or pretax, so theres no tax benefit for 2014, but qualified Roth distributions are completely free from federal income tax, which makes these retirement savings vehicles appealing. For 2014, you can contribute up to $17,500 to a 401(k) plan ($23,000 if youre age 50 or older), and up to $5,500 to a traditional IRA or Roth IRA ($6,500 if youre age 50 or older). The window to make 2014 contributions to an employer plan typically closes at the end of the year, while you generally have until the April 15, 2015, tax filing deadline to make 2014 IRA contributions.
Posted on: Wed, 10 Dec 2014 15:34:14 +0000
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