Grabbing That Last Minute Tax Deduction

holiday penguinWe just sent out a notice to all our clients with SIMPLE-IRA retirement accounts reminding them to max their contributions for 2013 and snag the ultimate in tax deductions.

We’re reposting that message here, in the event there are other diligent savers out there looking for a last-minute break.

(Sorry, this message applies only to those with an existing SIMPLE-IRA account.  if you haven’t already set up a SIMPLE-IRA plan for your business for 2013, it’s too late to do so. The deadline was October 1. But you’re just in time to get a jump on 2014, and set up a plan starting January 1. We often recommend the SIMPLE as the perfect retirement plan for our small businesses clients who have employees:

  • no annual overhead or administration costs
  • most contributions are made by employees, not employers
  • and there’s no complicated testing, reporting or accounting.

 

We know you have better things to do than worry about taxes this holiday season, BUT ….

…you only have a few days left to maximize contributions to your SIMPLE-IRA account if you have not already done so!

You can contribute up to $12,000 in salary to your SIMPLE-IRA ($14,500 if you are age 50 or older by December 31, 2013).

Here’s how your contribution benefits you:

  • You increase the amount of your potential employer match.
  • You escape taxation on the entire amount of salary being contributed (and the employer match, assuming you are the employer).
  • You benefit from years of tax-deferred growth in your SIMPLE account.
  • You move your unproductive cash into a tax-deferred, creditor-protected, long-term growth environment.

Have we convinced you?

If you have not already maximized your salary contribution, please take a moment to do so.

As an example, if you are in a 33% tax bracket, each $1 contributed costs you only 67¢.

The government is picking up the tab for the remaining 33¢.

Now that’s a holiday sale!

About Mari Adam

Mari Adam, Certified Financial Planner™ and President of Adam Financial Associates Inc, has been helping individuals and families chart their financial futures for over twenty-five years. Have a question about your financial situation? Ask Mari!

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