The official deadline for your 2014 IRA contributions is April 15, 2015. This still leaves you with a little time to make your 2014 contributions this year.
The limits for IRA contributions are $5,500, unless you are age 50 or older on or by December 31, 2014, then the limit is $6,500. The amount permitted for your deduction is also impacted by your filing status and modified adjusted gross income, as well as your participation in other retirement plans. Contact one of our financial advisors for information if you are unsure if you should contribute more this year.
Types of Contributions to Choose From by April 15:
- Roth- When contributing to a Roth the contribution is not deductible. However, growth and qualified distributions are tax free. There are limits based on income that may reduce your ability to make this contribution.
- Deductible Traditional -This contribution is ideal if both you and your spouse do not have a 401(k) or similar qualified plan, and/or if your income is below certain limits. Your IRA contribution will be fully deductible on your 2014 tax return.
- Nondeductible Traditional -This contribution is for people whose income is too high for a traditional or Roth IRA. A nondeductible contribution to a traditional IRA will still likely result in tax benefits. Your account will still grow tax deferred but with qualified distributions, you will be taxed on growth only. There is also the possible option of converting the account to Roth IRA after contributing.
Contact our tax advisors, or take advantage of our investment advisory services to discuss your contribution options for 2014 with a friendly expert.