Tax Week: Retirement Savings

Throughout this week, we’re offering a few tips before your income taxes are due. On Tuesday, we looked at some of the tax advantages of being a home owner. Today, let’s talk about your retirement savings.

retire

Here are a three items to consider when completing your 2012 tax returns:

  • 2012 IRA Contributions Still Possible

Didn’t make an IRA contribution last year? There’s still time! You can make a 2012 IRA contribution up until April 15, 2013.

If you contribute to an IRA between January 1 and April 15, 2013, you will need to make sure the deposit is appropriately designated as a 2012 or a 2013 contribution. Also, you can file a tax return claiming an IRA contribution before the deposit is actually made, but the money must be in the account by the due date of your return.

  • The Savers Credit

The Savers Credit is a non-refundable tax credit available to eligible taxpayers who make contributions to their employer sponsored 401(k), 403(b), SIMPLE, SEP or governmental 457 plan, and/or make contributions to their Traditional and/or Roth IRAs. This can make a significant impact on your taxes and, more importantly, could be an incentive to put some more money away for retirement. Click here for more information from IRS.gov.

  • Plan For The Future

While going through your financial records from 2012, it’s an easy time to evaluate your savings goals – and actions. Take a moment to look back at how well you saved, both for a rainy day and for retirement. If you didn’t do as well as you would have liked last year, re-commit for the rest of 2013.

Also, get to know what legal changes might impact your ability to save this year. Contribution limits for 401(k)s and IRAs will each increase in 2013; however, catch-up contributions for workers age 50 and older will remain the same. If you fund either type of retirement account through a payroll deduction, consider resetting your contribution amount to keep pace with the higher limits.

As we said on Tuesday, you can refer to IRS.gov for more answers to your tax questions.  However, we strongly recommend consulting with a trusted tax advisor with any additional questions or concerns about how owning a home or saving for retirement can impact your 2012 income tax returns.

Banco Popular North America, its parents, affiliates, subsidiaries, agents, or employees do not provide tax or legal advice. Please consult with your attorney, financial consultant/planner, accountant, and/or tax advisor for advice concerning your particular circumstances. The information contained in this Internet site is for general informational and educational purposes only and should not be construed as professional advice or a legal opinion on specific facts or circumstances. The information or opinions contained in this Internet site should not be construed by any consumer and/or prospective client as an offer to sell or the solicitation of an offer to buy any particular product or service. Links to other sites are for your convenience in locating related information and services.

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