As Tax Day 2015 looms nearer, savvy investors are adding one more thing to their To-Do list besides completing their taxes. Unless you will be filing an extension, April 15th, 2015 is also the due date for all IRA contributions for tax year 2014. Why does this matter? Well, IRA contributions are when an individual takes personal funds and deposits them into an IRA account. When a contribution is made to a before-tax account, such as a Traditional, SEP, or SIMPLE IRA, the amount of the contribution is usually tax deductable and can net you a nice refund from Uncle Sam. Besides the short term perk of reducing your tax bill, the contribution to your IRA account then grows within a tax sheltered environment, allowing you to compound the power of your investment earnings since they grow tax free within the account. The compounding effect of the tax sheltered IRA account produces a major long term benefit as well, the generation of greater wealth for the IRA holder and a more robust financial future.
Still not convinced? You might want to consider that contributions are a use it or lose it deal from the IRS. If you contribute less than the maximum amount allowed to your plan, you cannot make up the difference in a different tax year. The IRS caps contributions for IRA accounts at a specific amount each year, regardless of how much or how little you have contributed in the past.
The annual contribution limits differ for each type of IRA. A detailed list of contribution limits can be found at: *****
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Midland IRA does not sell any products or offer any investment advice. All information is for educational purposes only; please consult your tax advisor or CPA before investing.