With 2016 right around the corner, use these 5 tips to maximize tax savings for your retirement plans, whether you’re retired or still working.
Get Ready for 2016. If you failed to max out your 401(k) or IRA contributions in 2015, and you’re expecting a year-end bonus, consider making a one-time contribution to your 401(k) or 403(b) accounts, up to the maximum contribution amount.
Extra time for IRA contributions. You have until April 15th (Tax Day) to make a contribution to your traditional IRA, up to $5,500, and have it applied to your 2015 tax year. If you’re anticipating a tax hit on your 2015 return, consider paying yourself instead with a tax-deferred retirement contribution.
Take required minimum distributions. If you were born before July 1, 1945, you’re required to take a minimum distribution from your 401(k) by December 31, 2015. Failing to take a required minimum distribution (RMD) carries a tax penalty of 50%.
Make last-minute 401(k) contributions. All 401(k) contributions for tax year 2015 must be maid by December 31, 2015. Employees can make up to $18,000 in contributions each year and those over 50 can make catch-up contributions of up to an additional $6,000 (total of $24,000). With compound interest, every little bit counts.
Claim the saver’s credit. If your adjusted gross is below $30,500 for individuals, $45,750 for heads of household and $61,000 for couples in 2015 and you contribute to a 401(k) or IRA, you may be able to qualify for the saver’s credit, worth between 10 and 50 percent of the amount you contribute to a retirement account, up to $2,000 for individuals and $4,000 for couples.
Seek the advise of your financial planner and CPA prior to making tax-based investment decisions.
Author Bio
Paul Yokabitus
Founder & Estate Planning Lawyer
Paul Yokabitus is the founder of Cary Estate Planning, where he helps North Carolina families protect what matters most through wills, trusts, probate, and special needs planning. Known for his “planning, not paperwork” approach, Paul turns complex legal concepts into clear, practical strategies so clients feel informed and confident at every step. He has been recognized as a Business North Carolina Legal Elite attorney and a Super Lawyers Rising Star, and was named to the Triangle Business Journal’s 40 Under 40. A graduate of Campbell University School of Law, Paul lives in the Triangle with his wife, Alix, and their two sons.
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How We Help North Carolina Families
Paul and his team at Cary Estate Planning are fully committed to creating a personalized experience to develop thorough and comprehensive estate plans. They value their clients and go above and beyond to make sure that no details are missed. I would highly recommend Paul to anyone looking to create an estate plan.
I was referred to Paul by my Real Estate Attorney and I could not say enough about how exceptional the client service has been from everyone I spoke to. The communication is prompt and I feel like they really took the time to answer all my questions and set things up exactly as I wanted, but also recommended things to make it easier on my family down the line.
After attending one of Paul’s estate planning seminars, my husband and I knew we wanted Paul to assist us with our estate planning. His honest, professional approach to this necessary part of life put us at ease with the process. We will continue to recommend Paul and Cary Estate Planning.
We had a great experience working with Paul Yokabitus and the team at Cary Estate Planning to set up our Will and Estate Plan. The process was clear and easy, and in the age of COVID, our signing session was very well done, easy, and safe.
The Cary Estate Planning team will make sure that you have the information you need to be confident in your estate planning decisions. I learned so much from videos, a one-on-one in-person consultation, the website, emails, and a newsletter mailed the old fashioned way. The fee is very reasonable given the importance of estate planning. No matter the size or number of your assets, don’t procrastinate like I did!
Paul is a masterful attorney. He’s very good at taking your intentions and defining that into a durable Trust and Will. Best of all he is as simple and plain-spoken as you like. Or as fast as intellectual as you may be. It’s all about your your speed and your desired outcomes. Would strongly recommend this firm.
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Attorney Offices in Cary and Raleigh
Capability to meet virtually to help all NC residents
