Contributing to an IRA
Tax day is quickly approaching, and as you’re collecting all your W-2s, 1099s, and other tax documents, you may be wondering if you’re able to reduce your tax bill (or increase your refund) by making a contribution to an IRA.
While there are several factors that determine what kind of IRA you should utilize (see Traditional VS Roth: What’s the Difference and Which is Better?), the good news is that if you had earned income last year, you are allowed to contribute to an IRA. Congratulations!
However, don’t walk away just yet. The real question now is not whether you can contribute but whether it’s deductible and will help you with your taxes owed. To help you figure that out, here are two downloadable resources, one for last year and one for this year.
Can-I-Make-A-Deductible-IRA-Contribution-2023
Can-I-Make-A-Deductible-IRA-Contribution-2024
One important caveat to keep in mind is that if you make a non-deductible traditional IRA contribution, the non-deductible basis will have to be tracked until completely depleted via withdrawals. This could potentially complicate your tax return and/or increase tax prep costs, so make sure that the juice will be worth the squeeze if you decide to make non-deductible contributions.
As always, consult with your financial advisor and/or tax professional if you aren’t certain which type of retirement plan contribution is best for you.
Provista Wealth Advisors in Greenville, SC, provides peace of mind through personalized asset management, expert estate planning, and retirement planning. Navigate your financial journey with confidence. Rest Assured, We Have A Plan. Give us a call at (864) 696-2410 or send us a message to schedule your free introduction meeting.