There’s Still Time to Lower Your 2012 Tax Bill

There are only a few days left until the April 15 income tax  filing deadline. If you’ve yet to file, are there any things you can do to  lower your tax bill at this late date? You bet there are.

Make an IRA  contribution

If you already have a traditional IRA (Individual Retirement Account), you can contribute to  it up to April 15 and deduct the amount from your 2012 income. If you’re under  age 50 you can contribute up to $5,000. If you’re 50 or over, you can contribute up  to $6,000. If you’re married, you can double the contribution limits. This is  true even if one spouse isn’t working.

Make an SEP-IRA  contribution

An SEP-IRA is a simplified employee pension. It’s very  similar to an IRA, except that you can contribute more money under this plan.  Instead of being limited to a $5,000 to $6,000 annual contribution, you can  invest up to 20 percent of your net profit from self-employment every year, up to a  maximum of $50,000 for year 2012.

Make a 401(k) or Keogh  plan contribution

If you already have a 401(k) plan or Keogh plan, you still  have plenty of time to make a deductible contribution for the 2012 tax year. You  have until October 15 to make your 2012 contribution if you file an extension  to file your 2012 return. However, you must have established your plan by  December 31, 2012 to deduct a contribution for 2012. Depending on your income,  you can contribute up to $50,000 per year to these plans.

Make an HSA  contribution

If you set up a Health Savings Account by the end of 2012  and paired it with a high deductible health insurance plan, you have until  April 15 to fund it and deduct the payments from your 2012 taxes. Up to $6,250  can be deducted by families; $3,100 for individuals. You cannot establish an  HSA in 2013 and make deductible payments for 2012.

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