At the end of 2012, people were still not sure what income tax rates would be now. Diversifying the
tax status of your investments makes sense in the face of uncertainty about
future tax rates. While deferring income into a 401(k) or IRA is great for
saving on taxes now, a Roth IRA will save you on taxes later. Adding a taxable
brokerage account gives you long-term savings that you can access at any time.
The new year
brings new retirement account contribution limits. This is a welcome boost from
the $5,000 limits that have been in place since 2008. The new contribution
limits for 2013 are as follows:
- Traditional and Roth -
$5,500
- SIMPLE IRA - $12,000
- 401(k) – $17,500
- SEP IRA - $51,000
- If you are over 50, catch up contributions are still the same.
All contributions
are limited by your total taxable income, and the SEP IRA is limited to 25% of
your income. There is more information on our website, and check with your CPA
or tax preparer for more details.
Remember, if you contribute to a
Traditional, SIMPLE, SEP or 401(k) account, your contributions are tax
deductible. This gives you instant savings on your taxes!
