7 Ways to Max Out Your IRA Contributions by April 15th
Did you know that if you make a personal IRA contribution before April 15th of this year, that amount is deductible on your 2014 taxes? If you have the extra cash on hand, this is a great way to boost your retirement account while reducing your current tax burden. Here are seven creative ways to come up with that extra contribution money in the next month.
1. Don't Dine Out
April 15th is about a month away. What if you could make a promise to yourself not to eat out at all in the intervening weeks? Skip the morning coffee pick-up, bring your lunch to work, and find free ways to spend time with friends. Now, take all of that money you would have spent and deposit it into your IRA account, instead. It may sound like a big sacrifice, but it's only a month long and could add up to a big tax break.
2. Lace up Your Walking Shoes
Transportation is another big expense for many people. Consider when you might be able to use your own two feet, take low-cost or free public transportation, or bike to get you from point A to point B. Then, you can bank that transit money right into your IRA account.
3. Delay Spring Wardrobe and Home Purchases
Once the warm weather arrives, we're anxious for a personal and home makeover. If you can delay making any purchases such as these for the next month, you can use that money to contribute to your IRA. Think of it as giving your future self the gift of more freedom by putting that extra money into your retirement account today.
4. Itemize Your Deductions
Many people don't want to be bothered with itemizing their expenses, because it can take some time and requires additional organization and paperwork. However, if your itemized deductions are greater than the standard deduction, you'll save on taxes you owe, or get a bigger refund. Calculate your potential savings and put away that money in your IRA now to enjoy later.
5. Student Loan Interest Deduction
Many working adults today have student loans. If you make less than $80,000 per year as an individual (or less than $160,000 if filing jointly), you can deduct the interest you've paid on student loans. Use the money you'll save on that deduction to increase your contribution to your IRA.
6. Make Your Vacation a "Staycation"
After the rough winter we've had this year, it's tempting to take advantage of the ever-present travel deals being offered. Resist their offers and turn your spring vacation into a staycation. Chances are your hometown comes back to life once it thaws out from winter, and there are plenty of opportunities to re-discover it through events and activities that will help you feel like a tourist in your own backyard.
7. Delay Big Purchases
My laptop is now over five years old, and it's showing its age a bit with decreased speed. I'm tempted by all the features now available on new laptops, but I've decided that I can deal with a bit of decreased speed for the sake of banking some extra money. When it comes to big purchases like electronics, one thing is certain: In six months there will be a brighter, shinier model that's likely no more expensive than today's top-of-the-line. Get as much value out of your durable goods as possible, and only replace them when it's truly necessary. You'll be glad you did once you see that extra money accruing in your savings account.
Maxing out your IRA isn't the sexiest purchase you'll ever make, but it's important to contribute as much as you can as soon as you can to take advantage of the compound interest it will generate.
What clever tricks are you using this tax season to max out your IRA contributions?
Disclaimer: The links and mentions on this site may be affiliate links. But they do not affect the actual opinions and recommendations of the authors.
Wise Bread is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.com.
