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There Is Still Time To Fund Your 2011 IRA

February 1, 2012

Don’t forget that you can still contribute to your 2011 IRA.  According to the Internal Revenue Service, contributions can be made to your IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. Here are a few general tips about setting aside retirement money in an IRA.

You may be able to deduct some or all of your contributions to your IRA. You may also be eligible for the Savers Credit formally known as the Retirement Savings Contributions Credit.

Contributions can be made to your traditional IRA at any time during the year or by the due date for filing your return for that year, not including extensions.

The funds in your IRA are generally not taxed until you receive distributions from that IRA.

For 2011, the most that can be contributed to your traditional IRA remains at $5,000 or $6,000 for taxpayers who were 50 or older at the end of 2011.

Traditional IRA contributions may be limited, depending on your income. Roth contributions are also subject to income limits

You must be under age 70 1/2 at the end of the tax year in order to contribute to a traditional IRA.

You must have taxable compensation, such as wages, salaries, commissions, tips, bonuses, or net income from self-employment to contribute to an IRA. If you file a joint return, generally only one of you needs to have taxable compensation.

Because April 15, 2012, falls on a Sunday and Emancipation Day on Monday, the due date for making contributions for 2011 to your IRA is April 17, 2012.

So, whether you are making a last minute IRA contribution for 2011 or planning ahead for 2012, consider the benefits of an IRA.

One more note.  The Avanti Reader, its parent company, associates, agents and representatives cannot give legal or tax advice. Making effective year-end financial decisions requires a solid understanding of tax rules and regulations that are complex and subject to change.  Always get professional assistance from your attorney or tax advisor.

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