Commentary by Adam Cmejla
Ah, tax season. The time of year where 1099’s, 5498’s, W-2’s, 1098’s, 8606’s, 1098E’s, and a flurry of other tax forms fly around similar to the way the confetti flew around after the Super Bowl! While there’s nothing we can do to avenge the Colts loss to the eventual Super Bowl Champion New England Patriots, there are still a few steps you can take to potentially minimize that tax bill owed or increase your potential refund before April 15 and set yourself up for a fiscally sound 2015.
Make an IRA contribution. If you had earned income (think W-2) and your AGI (Adjusted Gross Income) is below certain thresholds, you can make a deductible IRA contribution for 2014. You can contribute the lesser of 100 percent of compensation or $5,500 for tax year 2014, though special spousal rules apply if you don’t work but your spouse does. If you are over the age of 50, you can add an additional $1,000 “catch up” to a total of $6,500.
Fund that HSA. If you are covered under a high deductible health care (HDHC) plan and have been covered for the previous 12 months, then you can contribute $3,300 if you are covered under a single policy or $6,550 if you are covered under a family plan. If you are over the age of 55 you can contribute an extra $1,000. Keep in mind those that are enrolled in Medicare are not eligible to contribute to an HSA, but you can still make distributions from an HSA for qualified distributions/expenses.
Adam Cmejla, CMFC® is President of Integrated Planning & Wealth Management, a comprehensive financial services firm located in Carmel providing comprehensive retirement planning strategies to individuals near or in retirement. He can be reached at 853-6777 or email@example.com.