How Can You Reduce Annual Income Taxes and Save for Retirement?
Employees: make contributions to your 401(k) plan with pretax dollars. You can also reduce current-year taxes by making tax-deductible contributions to an IRA if you qualify.
Self-employed: use a SEP (Simplified Employee Pension), or SIMPLE (Savings Incentive Match Plan for Employees) plan to shelter income.
Have you Considered Making a Charitable Donation?
Depending on your specific tax picture, charitable donations could provide a good source of income tax deductions. One tax-saving strategy is to donate a portion of your required minimum distributions or a portion of your income to a charity of your choice.
Do You Have Children or Grandchildren?
There are two types of 529 plans: state savings plans and prepaid tuition plans.
The earnings on the contributions are tax-deferred. Distributions from the 529 plan are tax-free, as long as they’re used to pay for qualified higher education expenses. In 2017 plans were expanded to include K-12 tuition.
+ Prior-year IRA contribution: The deadline for contributions to traditional IRAs and Roth IRAs for the prior year is April 15.
+ Federal gift tax return: The deadline for gifts made between January 1 and December 31 of the previous year is April 15.
Reporting a loss on the sale of stock: A trade to sell a long or short position must be executed by the close of the last trading date of the current year.
529 plan contribution deadlines for Colorado are Dec. 31.
Charlotte Jay is a financial advisor located at 7901 SouthPark Plaza Ste 102 Littleton. She offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser. She can be reached at 303.260.7494 or at CJay@JayFinancialGroup.com
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