Taxes — too late for an IRA deduction?
We make $150k a year. We get $700 Michigan refund. We pay $4700 Fed tax.
Should we put more money in IRA to offset Fed tax? I will retire in 2 years, my wife 7 years.
Tax preparer suggests having additional Fed tax taken out per pay period, so we are not paying so much? Any other suggestions?
Terry Says
Well, just increasing your withholding does not cut your taxes. It just makes it less obvious and thus less painful when it comes time to file!
If you’re still working, yes each of you should put away $7,000 in an IRA– and just invest it conservatively perhaps in a MM fund. It is a big deduction. And you can do it now for 2022 if you haven’t filed your tax return yet. Just go to your bank and each open a separate IRA for 2022 (make sure it states that on the opening account papers that it is for 2022).
YOu have until April 18th — the day your return is due — to make the contributions.
And if you have already filed, make the contributions anyway and file an amended return. The tax preparer shouldn’t charge you fore that since he was negligent in not informing you of this available deduction.
