IRA and Wisconsin 529 College Savings Plan

3/16/2016

Individual Retirement Arrangement

It's not too late to claim a 2015 tax deduction if you contribute to an IRA by your tax due date for 2016, which for most people is April 18, 2016.

Are you wondering if you qualify? The below should help:

Age Rules. You must be under age 70½ at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.
Compensation Rules. You must have taxable compensation to contribute to an IRA.
Contribution Limits. The maximum you can contribute to your IRA for 2015 if you are under 50 years old is $5,500, 50 years old or older $6,500. Your age is determined by how old you are on 12/31 of the tax year. If you try to overachieve and contribute more then the law will allow you will be penalized at a high percentage.
Taxability Rules. You shouldn't have to pay taxes on the funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free however the contributions can't be used to reduce your tax liability.
Saver’s Credit. You can enjoy a 50%, 20%, or 10% or your IRA contribution up to $4,000 married filing joint.

Wisconsin 529 College Savings Plan

Good news for the State of Wisconsin Residents! Wisconsin taxpaying residents have the power to lower their own State tax liabilities dollar for dollar up to $3,100 ( per child) when you invest in a qualified Wisconsin 529 College Savings Plan. Make your contributions by your tax due date and you can tax advantage of the Wisconsin State Education Credit for 2015.

Benefits:

Tax break dollar for dollar
Invest in the future of a loved one
Opportunity to save money

Who qualifies?

Parents, grandparents, other relatives, trusts, guardians--anyone can open an account [as long as you are 18 or older].
You can also open an account for yourself
Any adult can contribute to an account.

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Important Disclosures

Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

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