Beyond Tax Return: The 3 Tax-Saving Tools You Want to Remember
Yes, you are focused on your tax returns but don't forget that April 18 also happens to be the deadline to avail of certain other tax opportunities.
Did you know that many tax saving opportunities are found outside your tax return, but still follow the same deadline? There is still time to take advantage of some of these.
- Roth IRA contributions: if you are within the applicable IRS income limits, you can open and contribute to a Roth IRA account by April 18th. Although your contributions are not deductible, the advantage of Roth IRAs is the potential for tax-free earnings. No extensions are allowed beyond April 18th for Roth IRA contributions.
Traditional IRA contributions: contributions are fully deductible if your employer does not offer a retirement plan and are limited based on IRS income limits if you are eligible to participate in your employer’s retirement plan. Income taxes on contributions and earnings are deferred until distributions are made. No extensions are allowed beyond April 18th for Traditional IRA contributions.
- Health Savings Account (HSA): If you have a High Deductible Health Plan, setting up an HSA might be a good tax saving opportunity for you. Contributions, earnings and distributions from an HSA are tax-free as long as these are used for qualified medical expenses. The deadline to open and contribute to an HSA for the 2015 tax year is April 18th. No extensions are allowed beyond this date.