This article was last updated on September 12
If you are looking for a common and highly effective way to cut your tax bill for this year and/or the next, then consider opening a Traditional IRA or Roth IRA before the IRA contribution deadline (April 15th). The following brokers have great offers for those looking to open or transfer an IRA account in the near future:
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|TD Ameritrade||$9.99 stock and option trades
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An IRA (individual retirement account) is your personal savings plan for retirement, offering tax advantages and growth that compounds over time. Unlike employer sponsored 401K plans, where the administration is taken care of by the company, you are responsible for the opening and ongoing management of your IRA account. You can also rollover funds between the different IRA account types as your financial, employment or tax situation changes.
IRA contributions can be made at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means contributions for must be made by April 15. Additionally, if you make a contribution between Jan. 1 and April 17, you should designate the (previous) year targeted for that contribution. Otherwise it will count for the current year. You must also be under age 70 1/2 at the end of the tax year in order to contribute to a traditional IRA. Refer to IRS Publication 590, for more information on contributing to your IRA account.