I work part-time at an engineering firm and my wife and I have a family business that we own and operate. I'm attempting to reduce our AGI by opening and fully funding an IRA (my 401K is already maxed out) in my name and her name before the tax deadline. My question is: what is the latest you can wait to fund the account for the 2014 tax year? For example, can I log on to Fidelity's website on the 14th of April and open and fund a new IRA for both of us so it counts toward 2014?
Funding a Traditional IRA before 4/15/2015
- Thread starter ryansride2017
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Yes.
I tried with fidelity last year and was told it would be several days to verify my bank account before my account could be created so don't wait till the last minute. Ended up going with TIAA-CREF and it only took a few minutes. You have to be a school employee to use CREF though I believe.
I was going to say exactly what other people are saying. Don't wait until the last minute, it might take time to open the account or establish/verify information. At a minimum, open it now, and then continue to fund what you can between now and then so you're not caught unprepared.
Check and see if you can contribute to both a company sponsored 401K and traditional IRA for the write off. I think you can only do one or the other as a deduction. Meaning for me the 401k is fine but the other goes into a Roth since there was no immediate tax benefit for me.
It takes several days to accomplish the paperwork, often a notarized signature is required.
You have until April 15th to make the contributions for Tax Year 2014, but make certain that you've already got the account in place. As others have said, you can always establish an account that invests in a money market for now, until you determine how this will fit into your portfolio.
Be careful, however, in many circumstances, the Traditional IRA is not deductible. If you're covered by a pension (e.g. civil service) or if your income exceeds a certain level (I think it's 160,000 but it might be less) then you can't deduct the contributions.
You can still make contributions in that case, and the amount of your contributions becomes the basis of your account. You'll have to file form 8606 to track that basis.
If you're not able to make deductible contributions, then a Roth IRA (which isn't deductible in any case) might be a better move. The contributions are non-deductible, but you're not taxed on the withdrawals as you would be in a Traditional IRA.
You have until April 15th to make the contributions for Tax Year 2014, but make certain that you've already got the account in place. As others have said, you can always establish an account that invests in a money market for now, until you determine how this will fit into your portfolio.
Be careful, however, in many circumstances, the Traditional IRA is not deductible. If you're covered by a pension (e.g. civil service) or if your income exceeds a certain level (I think it's 160,000 but it might be less) then you can't deduct the contributions.
You can still make contributions in that case, and the amount of your contributions becomes the basis of your account. You'll have to file form 8606 to track that basis.
If you're not able to make deductible contributions, then a Roth IRA (which isn't deductible in any case) might be a better move. The contributions are non-deductible, but you're not taxed on the withdrawals as you would be in a Traditional IRA.
Originally Posted By: Astro14
It takes several days to accomplish the paperwork, often a notarized signature is required.
You have until April 15th to make the contributions for Tax Year 2014, but make certain that you've already got the account in place. As others have said, you can always establish an account that invests in a money market for now, until you determine how this will fit into your portfolio.
Be careful, however, in many circumstances, the Traditional IRA is not deductible. If you're covered by a pension (e.g. civil service) or if your income exceeds a certain level (I think it's 160,000 but it might be less) then you can't deduct the contributions.
You can still make contributions in that case, and the amount of your contributions becomes the basis of your account. You'll have to file form 8606 to track that basis.
If you're not able to make deductible contributions, then a Roth IRA (which isn't deductible in any case) might be a better move. The contributions are non-deductible, but you're not taxed on the withdrawals as you would be in a Traditional IRA.
Good post. Also, you have to think about if you will be filing single married or joint. There are income limits for the married couples if you file jointly.
It takes several days to accomplish the paperwork, often a notarized signature is required.
You have until April 15th to make the contributions for Tax Year 2014, but make certain that you've already got the account in place. As others have said, you can always establish an account that invests in a money market for now, until you determine how this will fit into your portfolio.
Be careful, however, in many circumstances, the Traditional IRA is not deductible. If you're covered by a pension (e.g. civil service) or if your income exceeds a certain level (I think it's 160,000 but it might be less) then you can't deduct the contributions.
You can still make contributions in that case, and the amount of your contributions becomes the basis of your account. You'll have to file form 8606 to track that basis.
If you're not able to make deductible contributions, then a Roth IRA (which isn't deductible in any case) might be a better move. The contributions are non-deductible, but you're not taxed on the withdrawals as you would be in a Traditional IRA.
Good post. Also, you have to think about if you will be filing single married or joint. There are income limits for the married couples if you file jointly.
Originally Posted By: ryansride2017
..... my wife and I have a family business that we own and operate.
If you are looking for a place to stash additional retirement money, consider setting up a SEP-IRA or SIMPLE IRA for your business. If deduction limits are a concern, money you contribute to one of these plans will always be pre tax. Contribution limits for the SEP are higher, too - 25% of compensation or $53,000 in 2015. No complicated IRS reporting is required, and you can self direct the investments if you want. You can set them up at a discount brokerage, with your favorite mutual fund, or at a bank.
..... my wife and I have a family business that we own and operate.
If you are looking for a place to stash additional retirement money, consider setting up a SEP-IRA or SIMPLE IRA for your business. If deduction limits are a concern, money you contribute to one of these plans will always be pre tax. Contribution limits for the SEP are higher, too - 25% of compensation or $53,000 in 2015. No complicated IRS reporting is required, and you can self direct the investments if you want. You can set them up at a discount brokerage, with your favorite mutual fund, or at a bank.
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