November 3, 2016
contribute to retirement accounts

Don’t Forget to Contribute to Retirement Accounts!

Contribute to retirement accounts before the end of 2016! You need to contribute to retirement accounts like your 401(k) or other workplace retirement plan by December 31st. This ensures your contributions count for 2016. However, you still have until April 15, 2017, to contribute to other retirement accounts such as an IRA for 2016. Low- and moderate-income workers can also take advantage of the Retirement Savings Contribution credit. This rewards them for making contributions to IRAs, 401(k)s, and similar retirement plans. The maximum credit is $1,000 per taxpayer, though other deductions and credits will reduce the benefit. With this credit, eligible taxpayers deduct retirement contributions from their Adjusted Gross Income, as usual. On top of that, they can deduct an additional percentage of their contribution, as outlined in this chart: Saver’s Credit *Single, married filing separately or qualifying widow(er) Though anyone over 18 can apply for the credit, full-time students and those claimed as dependents are not eligible. So don’t forget! Contribute to retirement accounts to prepare for your future and catch a break right now! Tip courtesy of IRS.gov
September 29, 2016
Early Withdrawal from a retirement account

Early Withdrawal from a retirement account?

Thinking of taking an early withdrawal from your retirement account? Here’s what you need to know before you pocket that cash. According to the IRS, taking money out of your retirement account before age 59 ½ is not something to take lightly. Doing so can land you in hot water come tax time, triggering additional taxes. You’ll also lose some of you reserves to penalties. Here are some things to keep in mind: Early Withdrawal Tips Report all early withdrawals to the IRS, unless you are rolling the money over into another type of retirement account. Not reporting the withdrawal be a costly mistake you’ll end up paying for. Consult a qualified tax professional or your plan’s administrator if you are unsure. A generally rule of thumb is that you will also pay a 10% penalty on top of your income taxes on any early withdrawal. However, there are some exceptions to this rule, depending on your retirement plan or account. Again seek advice from your plan’s administrator or a tax profession to know which rules apply to you. Additionally, if you make an early withdrawal, you may need to file Form 5329. This from reports your early withdrawal as income for the […]