When it comes to your IRA and taxes, it’s good to know these three important points:
- You can still receive a deduction on your 2009 taxes through April 15
- You can make a double contribution through April 15
- You can convert to a Roth IRA anytime in 2010 and gain some distinct advantages
You Can Still Receive a Deduction on Your 2009 Taxes through April 15
Even though it’s late March 2010, there’s still time (through April 15) to make a contribution to your Traditional IRA for 2009 and receive a tax deduction that’s applied to your 2009 taxes (if you qualify). The contribution maximum is $5,000 and if you’re age 50 or older, you can contribute a “catch up” amount of $1,000. What’s more, this special time of year works for more than just IRAs. The same deadline applies to the Health Savings Account (HSA) and Coverdell Education Savings Account (CESA).
You Can Make a Double Contribution through April 15
As a Self-Directed IRA investor, you’re able to contribute twice to retirement savings while staying within IRS contribution limits. From now through April 15, 2010, you can make what is essentially a double contribution to your Traditional or Roth IRA – up to $5,000 for 2009 and another $5,000 for 2010 for a total contribution of $10,000. And, if you’re age 50 or older, you can add the “catch up” amount of $1,000 to each year’s contribution. Starting early will give your money more time to compound, grow and be protected from taxes.
You Can Convert to a Roth IRA Anytime in 2010 and Gain Some Distinct Advantages
Under the new 2010 IRS rule – for the year 2010 only – if you convert an existing retirement account to a Roth IRA, you can split the converted income amount between 2011 and 2012. That means you wouldn’t pay any taxes in 2010 on the amount converted.
There you have it. Three helpful points to know about your IRA and taxes. Want to know more? Contact an Equity Trust Retirement Specialist today at 1-888-382-4727.
Filed under: Uncategorized on March 24th, 2010