2015 might have come and gone and you might have spent more than you wanted to and you might think that there isn’t much that you can do to reduce the spending effect but if it’s your tax bill that you are worried about, know that there is still time.
Save on your tax bill:
If you are an employee who likes to save for your retirement through a government funded account, then you can put your money in there and save a lot of money on your tax bill. It does differ on the basis of tax rate, but an IRA contribution made at the last minute can help you in saving thousands. Here’s how:
The bigger your tax bracket is, the more you will save. You can contribute up to 5500 dollars to an IRA and can defer the payment of income tax. You will be able to either make your tax bill lower or get an increase the refund that you are owed. Another thing to remember is that if you are over 50 then you can get an even better deal. If you contribute around 1000 dollars or more to an IRA, it will get you a bigger deduction. For example, if you are 55 and you fall in the 25 percent tax bracket; your 6500 dollar contribution is going to help you reduce 1625 dollars.
Another way to get a tax break is via your spouse’s IRA. All you have to do is open two accounts, each on the name of one spouse.
An important thing to note in this regard is that the deadlines differ in every state. So if you are planning to save some money, make sure that you act late but not too late because you don’t want the deadline to end.
