April 18th isn’t only the tax filing deadline this year, it’s also the deadline for contributing to your Traditional and/or Roth IRA for calendar year 2015. Yes that’s right you can still make a contribution for tax year 2015 and invest in these tax advantaged accounts. Unfortunately, there are bunch of pesky rules out there regarding IRA contributions. As with all tax related questions, please be sure to ask your accountant if you are eligible and then partner with your advisor to set a proper investment strategy.
Can I contribute?
Not everyone can.
If you or your spouse has qualifying earned income, then yes you can contribute up until you reach age 70 ½.
You will also need qualifying earned income here, but contribution eligibility is subject to a modified adjusted gross income (MAGI) phase out starting at $184,000 for couples filing joint tax returns and $117,000 for individual filers, however you can contribute beyond age 70 ½ as long as you still have income.
How much can I contribute?
You can contribute a maximum total of $5,500 per person across the IRAs that you are eligible for. If you were age 50 or older in 2015, you can bump that total up by an additional $1,000, for a total of $6,500 (called the catch-up provision).
Can I deduct my contribution?
This is the tricky part.
Contributions are never deductible.
Deductibility depends on whether or not you are covered (contributing) under your company retirement plan and your amount of earned income for the year.
- Married Neither Covered / Single Not Covered – Contributions are fully deductible
- Married Both Covered / Single Covered – Deductions are phased out beginning at a combined AGI of $98,000 for couples filing jointly and $61,000 for single filers.
- Married One Covered – Spousal deduction is phased out beginning at a combined AGI of $184,000.
In short, while you are busy agonizing over your tax bill, be sure you take advantage of the opportunity to set some capital aside for yourself.
Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on client assets of over $1.8 billion.Overview
Strategic Financial Services, Inc. is a SEC-registered investment advisor. The term “registered” does not imply a certain level of skill or training. “Registered” means the company has filed the necessary documentation to maintain registration as an investment advisor with the Securities and Exchange Commission.
The information contained on this site is for informational purposes and should not be considered investment advice or a recommendation of any particular security, strategy or investment product. Every client situation is different. Strategic manages customized portfolios that seek to properly reflect the particular risk and return objectives of each individual client. The discussion of any investments is for illustrative purposes only and there is no assurance that the adviser will make any investments with the same or similar characteristics as any investments presented. The investments identified and described do not represent all of the investments purchased or sold for client accounts. Any representative investments discussed were selected based on a number of factors including recent company news or earnings release. The reader should not assume that an investment identified was or will be profitable. All investments contain risk and may lose value. There is no assurance that any investments identified will remain in client accounts at the time you receive this document.
Some of the material presented is based upon forward-looking statements, information and opinions, including descriptions of anticipated market changes and expectations of future activity. Strategic Financial Services believes that such statements, information, and opinions are based upon reasonable estimates and assumptions. However, forward-looking statements, information and opinions are inherently uncertain and actual events or results may differ materially from those reflected in the forward-looking statements. Therefore, undue reliance should not be placed on such forward-looking statements, information and opinions.
No content on this website is intended to provide tax or legal advice. You are advised to seek advice on these matters from separately retained professionals.
All index returns, unless otherwise noted, are presented as price returns and have been obtained from Bloomberg. Indices are unmanaged and cannot be purchased directly by investors.