Still time to make your IRA contributions for 2011
Have you made your IRA contribution for 2011? If not, there's still time. An Individual Retirement Account is the only tax deduction you can take past the end of the year.
You have until the federal tax deadline. This year, that's April 17th.To make an IRA contribution you must have earned income.
"That is money you get from a job or business that you claim for tax purposes, then you're eligible to contribute," said Greg McBride, senior financial analyst at Bankrate.com.
McBride says there are limits to how much you can put in your IRA to get a tax break now.
"It’s $5,000 for anybody under age 50, $6,000 for anybody 50 or older."
And all of that money must be earned income. It can't come from investment income. So for example, if you only made $4,000 last year from an employer, you can only contribute $4,000 to an IRA.
With a traditional IRA, you pay taxes when you withdraw the money. The thought is, you'll be in a lower tax bracket when you do that.
More information:
Bankrate.com: IRAs
You have until the federal tax deadline. This year, that's April 17th.To make an IRA contribution you must have earned income.
"That is money you get from a job or business that you claim for tax purposes, then you're eligible to contribute," said Greg McBride, senior financial analyst at Bankrate.com.
McBride says there are limits to how much you can put in your IRA to get a tax break now.
"It’s $5,000 for anybody under age 50, $6,000 for anybody 50 or older."
And all of that money must be earned income. It can't come from investment income. So for example, if you only made $4,000 last year from an employer, you can only contribute $4,000 to an IRA.
With a traditional IRA, you pay taxes when you withdraw the money. The thought is, you'll be in a lower tax bracket when you do that.
More information:
Bankrate.com: IRAs
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