The traditional IRA is an often-overlooked last-minute tax saving device. Yes, there are limits to IRA deductibility, but it can be a no-brainer in some circumstances. You should be thinking IRA if:
- You don’t have a pension plan at work.
- You have a spouse at home who doesn’t participate in a pension plan.
- You are a dependent with wage or self-employment income.
- You participate in a plan, but your 2008 income isn’t above the limits in the table below.
Source: IRS
If you qualify, you have until April 15 to start an IRA and make a deductible contribution. The limits are the lesser of your “earned income” (wage or self-employment income) or $5000 ($6,000 if you are 50 or over by the end of 2008).
Keep stopping by for new filing season tips through April 15!
Tags: IRA, Tips for filing 2008 returns
Joe Kristan writes the Tax Update items, and any opinions expressed or implied are not necessarily shared by anyone else at Roth & Company, P.C. Address questions or comments on Tax Updates to
Good coverage on the IRA. One thing I would add here, which most everyone forgets to mention, is that even if you can”t DEDUCT the IRA from your taxes, you should still move some money to an IRA as money in that account grows TAX FREE! And, in I believe in 2010 you can move all of it to a Roth IRA. Even better.