Use your income tax refund for retirement savings
Thursday April 9, 2009
The average income tax refund is well over $2,000. That's a good amount of money. Even if I could get past the fact that a sizable and predictable income tax refund represents an interest-free loan to the federal government (I can't, it drives me crazy!), I'm not giving you a free pass for you to consider this "savings" unless you actually save it!
I'm a big fan of automating good habits. Fortunately, the IRS has made it somewhat easy for you to do the right thing with your income tax refund. If you qualify, you can directly deposit your income tax refund straight into your regular or Roth IRA. (Use Form 8888.) The deadline for filing your tax returns, as well as making contributions for the 2008 tax year, is fast approaching. You can extend your tax return but you can't extend the deadline for making your IRA contribution. If you're one of those people who wants to save more but can never seem to afford to, use those income tax refund "savings" for the purpose you've been telling yourself - your financial future.
I'm a big fan of automating good habits. Fortunately, the IRS has made it somewhat easy for you to do the right thing with your income tax refund. If you qualify, you can directly deposit your income tax refund straight into your regular or Roth IRA. (Use Form 8888.) The deadline for filing your tax returns, as well as making contributions for the 2008 tax year, is fast approaching. You can extend your tax return but you can't extend the deadline for making your IRA contribution. If you're one of those people who wants to save more but can never seem to afford to, use those income tax refund "savings" for the purpose you've been telling yourself - your financial future.
I saw that in 2006 & 2007, one can make up to a $100,000 donation tax free out of IRA accounts. Has this been extended? Also, are there any tax implications for donating an entire IRA account to a charity?