There are many ways to decrease your tax liability and self-directed IRAs are just one of them. It’s that time of year when we are all scrambling to get our taxes done unless you are one of folks that happen to have everything completed February 1. In that case, here’s the pat on the back you deserve. For the rest of us, and yes extension filer club this includes you, we are cleaning up QuickBooks, searching for receipts, & trying to fund every retirement account we have to meet the deadline. Majority of self-directed IRA investors fall into this category so as your most experienced self-directed IRA provider we are here to help you out.
So what are some ways you can maximize these final days leading up to April 15 and impact our bottom line for the positive. There are quite a few out there you have to defer to your CPA. Hats off to creativity. Here are some options even the Millennials can partake in:
1 – Contribute funds to your Self-Directed Traditional IRA and/or Self-Directed Roth IRA. You can double down your contributions prior to April 15. Meaning you have until April 15, 2016 to make 2015’s contributions and you can also make 2016’s. Are you only $10,000 away from being able to do your next self-directed deal? This is your solution knocking.
2 – Contribute to your HSA (Health Savings Account) if you have a High Deductible Health Plan. We all have to have a health plan these days so this is becoming a big one! Millennials, you all should have this plan working for you. It is the best of both worlds, tax-free and tax deferred. This is what I call instant gratification in the self-directed world as we all have medical expenses.
3 – Open a Self-Directed Account of any kind! Tax-deferred or tax free it’s up to you. The message here is compounding interest. The most powerful force on earth. If I just lost you here, please google compound interest after you register below. It only works in your favor over time. If you never seize the day and open your self-directed account, you have accepted defeat in the retirement savings game. That’s ok, there’s always social security to fall back on.
4 – Kids count in more ways that just a tax credit. Saving for that private school, college, or graduate school? Get creative and do it with a CESA. (Coverdell Educational Savings Account.) Kids can have IRAs too you know. They just need a social security number & earned income. Interesting?
5 – Dumpster dive for those receipts. Dig though those shoeboxes of paper and make sure you have every possible deduction recorded before deadline day, April 15.
For a more detailed strategy on how one of these methods may benefit you and your family this tax season, click below to register for a 15 minute to the point strategy session that may save you money. Amanda Holbrook, VP of Business Development with Specialized Trust Company, hits all of the high notes to ensure you are covering all of your bases.
This post was written by Amanda Holbrook, VP of Business Development with Specialized Trust Company.