Put more dollars into your IRA
The amount you can contribute each year to an IRA has gone up. And it will continue to go up for some years to come.
Capitalize on higher limits. For the years 2003, and 2004, you can contribute up to $3,000 each year. For 2005, 2006, and 2007, the limit will be $4,000 and for 2009, $5000. After 2009, contribution limits will be indexed for inflation.
Make catch-up contributions. If you are fifty or older, you can make what is referred to as a "catch-up contribution" in addition to the regular contribution limit. The catch-up amount is $500 for years 2003 through 2005. It is $1,000 for years 2006 through 2010. So if you are at least 50, you can contribute a total of $3,500 for 2002.
Contribute for a nonworking spouse. These higher limits also apply to the amount you can contribute to a spousal IRA for your nonworking spouse.
If you'd like more information on how to use the new retirement plan rules to cut your taxes, give us a call at (703) 370-0019 or email at firstname.lastname@example.org.
Kahn, CPA PLLC