We know most 2022 income tax planning must be completed by December 31, 2022. However, there is one 2022 income tax reduction method you can use even now.
How? It’s simple. You may still contribute to your Traditional, SEP, or SIMPLE IRA until the 2022 income tax due dates. For most of us, that’s April 18, 2023.
Making a 2022 IRA contribution now has two benefits:
- It will reduce your tax bill. Depending on your income tax bracket, the reduction in income taxes could be a quarter to a third of the amount contributed.
- The IRA investment may continue to grow in the future.
In addition, in the future, you can convert the Traditional IRA to a Roth IRA which can save you even more in taxes on a growing investment.
Do you have money sitting in the bank? Consider adding some of it to your existing or new IRA account to decrease your income tax and increase your growth. Ready to contribute?
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