Following are some 2013 Federal Income Tax reduction strategies:
- Fund your Traditional IRA: If you are eligible, you can contribute to a tax deductible traditional IRA up to April 15, 2014. For Tax Year 2013, you can contribute up to $5,500 in a traditional IRA, and if you are age 50 and older, you can get an additional $1,000.
- While ROTH IRA’s do not reduce your taxable income directly, do not overlook this superb longer term tax strategy.
- Contribute to your 401k, or 403b. If your employer matches some of your contributions, you should always contribute at least the amount your employer matches. For example, if your employer will match up to 3% of your salary, be sure you contribute 3% into your 401K. At this point you will have saved 6% of your salary, and reduced your taxable income by 3%. 401k or 403b contributions must be made by 12/31/2013 for the 2013 Tax Year. You can contribute up to $17,500, plus $5,500 more if you are age 50 and older.
Unfortunately, there are many phase out rules, and other eligibility rules that apply to Traditional IRA’s. Please call us at CPA Accounting and Tax Solutions, 239-596-6050, for a free discussion, on the effective use of Traditional or ROTH IRA’s, and 401k or 403b products. We also offer a free look at your prior year tax returns. We often find overlooked tax deductions. Our web site, WWW.CPAACCTAX.COM includes information on our firm, our people, and our values, as well as many articles on saving for retirement and tax strategies.