There is Still Time to Contribute to Your IRA and Have it Count for the 2024 Tax Season
If you’re living in Winter Park, FL, and are in your prime earning years, it’s crucial to maximize your retirement savings. Did you know you have until April 15, 2025, to make contributions that will count for your 2024 tax return?
No Age Limit for IRA Contributions
Good news for Winter Park residents! There’s no longer a maximum age for making IRA contributions. This means you can continue to grow your retirement savings regardless of your age.
Traditional IRA: Tax Deductible Contributions
Contributions to a traditional IRA are typically tax deductible, while distributions are generally taxable. You have until April 15, 2025, to make contributions that count for your 2024 tax return. You can even file your return claiming a traditional IRA contribution before making the contribution, as long as you complete it by the April due date.
Roth IRA: Tax-Free Distributions
While contributions to a Roth IRA are not tax deductible, qualified distributions are tax-free. This can be a significant advantage for high earners in Winter Park looking to minimize taxes in retirement.
Contribution Limits for 2024
- General Limit: Eligible taxpayers can contribute up to $7,000 to an IRA for 2024.
- Catch-Up Contributions: If you’re 50 or older by the end of 2024, you can contribute up to $7,500.
- No Age Restrictions: The previous age limit of 70 1/2 for making IRA contributions was removed in 2020.
Maximizing Your Contributions
To determine if you’ve reached your maximum contribution amount for the year, add your regular traditional IRA contribution, your regular Roth IRA contribution, and any rollovers from 529 plans to your Roth IRA.
Income Phase-Out Ranges for 2024
- Single Taxpayers with Workplace Retirement Plans: $79,000 - $89,000
- Married Couples Filing Jointly (Spouse Covered by Workplace Plan): $126,000 - $146,000
- IRA Contributor Not Covered by Workplace Plan, Married to Someone Who Is: $236,000 - $246,000
- Married Individual Filing Separately (Covered by Workplace Plan): $0 - $10,000
- Roth IRA Contributions (Singles and Heads of Household): $150,000 - $165,000
- Roth IRA Contributions (Married Couples Filing Jointly): $236,000 - $246,000
- Married Individual Filing Separately (Roth IRA Contributions): $0 - $10,000
Saver’s Credit
Low- and moderate-income taxpayers in Winter Park making these contributions may also qualify for the Saver’s Credit, providing an additional incentive to save for retirement.
By understanding these key points and making strategic contributions, you can maximize your retirement savings and enjoy the tax benefits that come with it. Start planning now to secure a comfortable and financially stable future in Winter Park.
IRS Announces New Income Limits for IRA Contributions in 2025 | Morningstar
Important Disclosures:
Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by Fresh Finance.
LPL Tracking #705074
GFADSRT
