It’s Not Too Late To Contribute To Your IRA for 2007

If you’re scrambling for last-minute ways to cut your tax bill for 2007, you are in luck. Apparently, the IRS understands thos of us who are procrastinators, so they will allow you contribute up until April 15th, 2008 towards your IRA for it to count towards your 2007 contributions. this article via Yahoo Finiance from CNN Money, outlines the details.

Here are the fast facts:

  • Make Your contributions before April 15th, 2008, but make sure that you clearly state to your brokerage firm, financial advisor, or bank that you want the contributions to count towards your 2007 contributions.
  • $4,000 is the total amount you can contribute for 2007, and $5,000 for people over 50.
  • If you only have a 401(k), it’s too late to contribute to it to count towards your 2007 tax bill.
  • Keep in mind that the article is talking about a traditional IRA, not a Roth IRA. A Roth IRA shields your money from taxes when you take it out at retirement, not when you contribute it.

This is one of the last things you can do to count towards your 2007 tax bill, and it might be the difference between staying in a higher tax bracket or dropping to a lower one, which can translate into some big tax savings.

Published or updated: January 28, 2008

Categories: Investing, Taxes