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Last Chance to Trim Your 2018 Taxes with Retirement Plan Contributions

It’s not too late to reduce your 2018 tax bill. Retirement plan contributions for 2018 tax year are due April 15.

IRA Tax Tip: The 2018 maximum Individual Retirement account (IRA) contribution (regular or Roth) is $5,500. The IRA catch-up contribution for those 50 or older remains $1,000. The contribution is due April 15.

Note: If you are eligible for an employer retirement plan (even if you don’t join) may limit your tax deduction based on your adjusted gross income. If you are not eligible for an employer retirement plan, there is no earnings limit for you to make a deductible IRA contribution.

Business Tax Tip: Businesses (including sole proprietors contributing to a Simplified Employee Pension (SEP plan) can extend their tax return. This extends the due date for their 2018 plan year contribution for qualified retirement plans and SEP plans.

By extending your tax return, sole proprietors have until October 15 to fund their retirement plans. Partnerships and S-corporations on extension have until September 15 to fund their retirement plans. Corporations have until October 15 to fund their retirement plans.

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Richard Pon CPA, CFP