By Stacy Lewis
State Farm® agent
April 15 has long been considered a date to avoid. Visions of tax men coming for your money are common in many advertisements on television and in print.
Wouldn’t it be nice if you could do something to lower your federal income tax burden instead of mailing a big check on April 15? With a traditional Individual Retirement Arrangement (IRA), you may be able to do just that.
A contribution of the 2007 maximum of $4,000 prior to April 15, 2008 could reduce your taxable income, making your federal tax burden less for the year. If you were 50 or older by the end of 2007, you can add a $1000 catch-up contribution to potentially reduce the tax burden even more.
If you already have a traditional IRA, plan to make a contribution prior to the April 15 deadline. If not, talk to a financial professional as soon as possible to start one.
There are restrictions governing who may contribute to a traditional IRA. If you don’t qualify, consider a Roth IRA. You won’t get the federal tax advantages now, but qualified withdrawals can be made free of federal income tax during your retirement years.
Either way, having a plan for retirement is important. You owe it to yourself to make the best plan as soon as possible.
Stacy Lewis’ State Farm Agency is located at 4020 S. Cedar Street, Lansing, MI 48901. The phone number is 517-887-1777.
