As 2011 comes to a close and you look into 2012 – take a moment and use these tips to ensure you are taking advantage of the full benefits available to you from your IRA.
2011 Contribution Deadline
The deadline for 2011 IRA contributions must be postmarked by April 17, 2012. This gives you plenty of time to wrap up your year and determine if any contributions are appropriate for you. Please note that when you submit a contribution in 2012 for the year 2011 that you must irrevocably designate in writing that you are making this contribution for the year 2011.
2011 and 2012 Contribution Limits
If you are under 50 this year, the maximum IRA limit for contributions is five thousand dollars, up to the amount you made in taxable income in 2011. So if you only made four thousand dollars this year, this is the maximum you can contribute. This applies to both traditional and Roth IRA limits.
If you turn 50 or older this year the most you can contribute to your IRA is six thousand dollars, up to but not exceeding your 2011 taxable income. This amount includes the five thousand dollar limit that everyone qualifies for, as well as an addition one thousand catch-up contribution. Income limits do apply – please consult your tax advisor.
If you have both a Traditional IRA and a ROTH IRA, it is important to know that the limits above apply to combined contributions. The maximum you can contribute to all IRA’s is either $5,000 or $6,000 dollars.
If it has been a while since you established your Traditional or ROTH IRA it may be worthwhile to review and update your beneficiary designations. Keep in mind the following:
Primary Beneficiaries – Receives the IRA assets after the IRA owner’s death.
Contingent (Secondary) Beneficiaries – Receives the IRA assets after the IRA owner’s death only if all the Primary Beneficiaries die before the IRA owner’s death.
If you have questions, please feel free to give us a call at 1-866-848-0258.