Lowering Your Income Tax Bill
With the new year we all start thinking about income taxes and that dreaded April 15th deadline. For many, this is the time to make annual contributions to t IRAs for a tax deduction. Here are the limits and rules that apply.
The maximum annual contribution for an individual IRA is:
- $5,500 per person – OR –
- $6,500 per person if the individual is over the age of 50
The tax deduction depends on the individual’s level of income, as well as eligibility and contributions to a company qualified plan such as a 401k, 403b, or TSP for government employees, which includes the military.
I am amazed how I often I find that many people are not maxing out their 401k, 403b or TSP plan. Unlike an IRA, the tax deductible contribution limits are much higher and many times the employer gives a match up to a percentage of employees’ income. Limits for 401k, 403b and TSP plans are based on an individual’s income and age, and can be as high as $53,000 including the employer’s match. This can result in great tax savings.
We understand all the rules of different retirement plans and can help you understand them. We also offer a complimentary report called “27 Income Tax Strategies” that we have just updated to the latest rules for 2016/2017. To get your complimentary report call our office at 830 609-6986 or email us at [email protected].
* For tax advice, please consult your tax professional.
The views expressed represent the opinion of Christian Financial Advisors®. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Christian Financial Advisors® believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Past performance is not indicative of future results. For any discussion of equity securities: Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. For any discussion of taxes: Christian Financial Advisors® does not provide tax advice and encourages you to seek guidance from a tax professional.