The following are generally applicable year-end tax-saving tips regarding retirement. However, individual circumstances can have a significant impact on the appropriateness of tax strategies for a particular person. Contact us for a tax-planning meeting where we can discuss which approach would be best for you.
Your retirement plans probably offer more opportunities for tax savings than any other area of your life. By now, you should have made your choice between a regular IRA or a Roth IRA for your 2000 savings. There's no simple rule to help you decide which type of IRA to choose, so be sure we get together to discuss your situation and the various options available to you.
If you're an employee, make sure you contribute the maximum you can afford to your 401(k) plan this year. Adjust your contribution rate for the final few months if necessary. A 401(k) is still one of the best tax shelters around, and you should consider contributing as much you can.
Next, make sure that you have contributed the $2,000 maximum to your IRA (Regular OR Roth). A non-working spouse is now eligible to contribute up to $2,000 to a deductible IRA.
Changes in the law in 1998 mean that the spousal IRA may be deductible, even if the working spouse is covered by a retirement plan. This provision is subject to an AGI phase-out beginning at $150,000.
If you haven't been able to fully deduct your IRA contribution because you had a company pension plan and your AGI was too high, note that limits increased in 2000 and will continue to increase through the year 2007.
© Copyright 2000 Raymond S. Kulzick. All rights reserved. 001124.
This publication provides business, financial planning, and/or tax information to our clients. All material is for general information only and should not be acted upon without seeking appropriate professional assistance.