Your IRA Contribution And YouTime is marching on and you need to act fast in order to maximize the growth potential of your IRA account. An IRA contribution is an excellent way to make your retirement savings become larger and larger each day. No matter what your age, it is of the utmost importance to think about what you want to do in your old age! And, things will be much easier if you start today saving for those long-awaited retirement years. An IRA is tax free until you actually draw out the funds. Of course, you must remember that there is a limit to saving this way but put as much as is allowed into your account if it is at all possible. You will reap many rewards in the future. The deadline for making 2008 contributions to your IRA account is April 15, 2009 so now is the time to reach for that goal! Your IRA contribution limits are as follows: An IRA contribution to a Traditional IRA is an excellent way to get a high return on your investment. There are certain requirements that you must meet before you qualify for this type of account. First and foremost, you must be under the age of 70 ½ during the entire year that you wish to make your contributions and you must be earning some type of income from doing from personal services. IRS Revenue Procedure 91-18 specifically outlines what type of work fits this category. Basically it says that any amount shown in the “Wages, tips, other compensation” box on Form W-2 minus any amount shown in the “Nonqualified Plans” box will be considered eligible for Traditional IRA contributions. Remember, though, that investment income does not qualify as earned income when you are making contributions to your Traditional IRA. If you are currently working, under the age of 70 ½ and your employer has its own retirement plan set up for you, you can still make contributions to your own separate IRA plan. However, if you or your spouse participates in an employer-sponsored retirement plan then you will need to think about something. Your tax-deductible contributions to a Traditional IRA will depend on what your modified adjusted gross income is. If this measure is within or above the applicable thresholds, you will only qualify for a partial deduction or no deduction at all. If the preceding information is applicable to you then it is to your advantage to procrastinate no longer. Today may just the day that you decide to start saving for your future and make your first IRA contribution. You may even be able to leave a small inheritance to your heirs. |