You may not have an employer offered 401(k) but that doesn’t mean that you cannot have a tax deferred retirement account. One option is to fund an IRA (individual Retirement account). The maximum yearly contribution allowed is $6,000 if under age 50 and $7,000 if age 50 or older. An IRA must be funded by the filing date of your return excluding extensions. You have the option of funding either a Traditional IRA, Roth IRA, or both. If you choose to fund both, the total contribution cannot exceed the above limits.
Quick Tip: Traditional IRA contributions are tax deductible and grow tax free. Distributions from a traditional IRA are fully taxable. Roth IRA contributions are not tax deductible. They grow tax free and are not taxed when distributed. For more information contact your financial advisor.
Tip provided by:
Tilley & Lincoln, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
691 Addison Avenue – Twin Falls, Idaho 83301
Phone (208) 733-5811 – Fax (208) 733-5841