Contribute to your IRA before April 16
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USA Today
As the tax deadline approaches, take advantage of tax-deferred retirement savings plans. April 16 is the deadline for making IRA contributions for 2000.
Traditional IRAs let money grow tax-deferred. But you pay taxes on earnings when the money is withdrawn. There are two kinds:
• Deductible IRA. You are eligible to deduct contributions if you do not participate in employer-sponsored retirement plans, such as a 401(k), or have adjusted gross income (AGI) of $32,000 or less for single filers; $52,000 or less for joint filers.
• Non-deductible IRA. Not eligible for a deductible IRA? You can always contribute to a non-deductible IRA. Your money will grow tax deferred until you withdraw it. To make tax accounting easier, be sure to keep nondeductible IRA contributions separate from any deductible IRAs.
• Roth IRAs are growing in popularity. Although contributions are not tax-deductible, earnings grow tax-free. So, you'll never pay federal taxes on the earnings if you follow the withdrawal rules.
Single filers with AGI up to $95,000 are eligible to make a full $2,000 contribution; $150,000 for joint filers.
The contribution limit decreases as your income rises; when AGI hits $110,000 for singles, $160,000 for married couples, they can no longer contribute to a Roth IRA. You can contribute to a Roth IRA even after you are 70 1/2.
When making a last-minute IRA contribution, be sure to mark it for year 2000. For information, check with your tax adviser.
