By: Gene Snook, CPA
Happy New Year from all of us at Osborne Rincon! With a new tax season now upon us, individuals and businesses alike, are looking for last minute tax deductions that can help them on their 2014 tax returns. Post-year-end retirement contributions can be a great solution.
For the 2014 year, an individual may be eligible to contribute and deduct up to $5,500 to a Traditional IRA Account ($6,500 if age 50 or over). To be effective, the account must be opened and funded on or before April 15, 2015.
A non-deductible IRA to Roth IRA conversion is an excellent opportunity to fund a Roth IRA when income limitations would otherwise restrict an individual from contributing to the Roth IRA directly. Once converted, the earnings in the Roth will grow tax free and will not be subject to tax until distributed.
For businesses that did not have a retirement plan in existence by December 31, 2014, a SEP IRA is the way to go. A business can open and fund the SEP IRA by the due date of the return (including extensions) and still receive a tax deduction for 2014.
Taking advantage of post-year-end retirement contributions can amount to significant savings, and is one of the few tax deductions that can be achieved retroactively. If you have year-end tax questions or would like to see how you might benefit from making post-year-end retirement contributions, please feel free to call me at Osborne Rincon CPA's (760-777-9805). Have a healthy, happy and prosperous 2015!
Contact Gene Snook, CPA at 760-777-9805 for more information on our services.