It’s not too late to make your IRA contribution for 2016, whether you go with the tax-deductible traditional IRA or the Roth IRA (which is not deductible this year but offers many other advantages). In fact, you have until Monday, April 18 to contribute – and, if you’re eligible, it’s a good idea to do it.
If you’re going the traditional IRA route, making the maximum $5,500 contribution ($6,500 if you’re 50 or older) could slash $1,000 (maybe more) off your 2016 tax bill. And while a Roth contribution won’t impact this year’s taxes, it’s still a great tax-advantaged retirement savings vehicle.
Be aware, the tax deduction begins to phase out as your income increases, and it changes if you’re also contributing to a retirement plan through work. Check here for the deduction limits for your traditional IRA contribution.
For Roth IRAs, contributions may be limited based on your income. Those limitations start to kick in if your adjusted gross income (AGI) is $117,000 if you’re filing as Single, Head of Household, or Married Filing Separately (and did not live with your spouse at any time during 2016). For Married Filing Jointly, contribution limits start with AGI $184,000.