Even if you’re a prolific procrastinator, you can still make the most of your tax situation for 2010…even though it’s 2011.
- If you’re an individual with earned income in 2010—or even the spouse of an individual who had earned income in 2010—you should be able to make a contribution to an IRA right now and label it a 2010 contribution.
- If you’re an individual who made less than $56,000, or a married couple who made less than $89,000, you are able to make that contribution—and deduct it on your taxes, a single act that will decrease your taxable income for 2010 and increase your retirement savings for the future.
- If you’re under 50, you can contribute $5,000 per person—if you’re 50 or older, they let you drop in $6,000 per person. If you fall under those income limits, you can pull money right out of Uncle Sam’s hands and drop it into your retirement account—not a bad deal.
- If you made more than the aforementioned deductible IRA limits, but less than $105,000 as an individual or $167,000 as a married couple, you can instead exercise the option to contribute to a Roth IRA. In this case, you won’t improve your tax refund or payment for 2010, but you will never again pay taxes on that money as long as you…and your kids… and maybe even your grandkids live (assuming, of course, the government doesn’t go back on its word… which it would never do… right?).
- If you happen to be a business owner who had a great year in 2010, you may be able to legally “hide” up to $49,000 of your net profit (after expenses, not taxes) from the roving eye of the IRS in a SEP IRA.
To what do we owe the pleasure of these little extensions? When, you ask, has the IRS been known to make life easier on us? The answer is this…they’re sending us a message. The message is: WE don’t want to take care of you in retirement, so we’ll make it easier for YOU to do it YOURSELF.
When the IRS let’s us go back in time, we should take advantage of it.