04.18.23
Today until midnight, is the last day to submit the Tax return.
For those who are confused or lost, it is easy and free to apply for an extension through Turbotax in a few minutes.
You will need to upload, enter or estimate your income and owed tax assessment and pay the amount today.
If you end up owing more than what you paid, you will be charged an interest rate of 0.5% per month on the unpaid difference.
Today is also the last day to Contribute funds for the year 2022 to retirement investment accounts.
The IRA is recognized as tax-deductible, in which you will pay taxes at the time of withdrawal when retired.
The Roth IRA is not recognized as tax-deductible but is tax-exempt at the time of withdrawal when retired.
The ceiling for any or both combined for 2022 is $6000 for an Individual younger than 50, $7000 for seniors, and married couples doubled.
IRA contribution is not limited by an income ceiling. The Roth IRA is limited for 2022, with an income ceiling of $129k for an individual, $144k for a partial individual contribution, $204k for a couple, and $214k for a partially joined contribution.
Of course, the 2023 contribution can also be paid until April next year. The limits for 2023 increased by $500 for the contribution amount.
The ceilings for a single rose to $138k and $153k respectively and 218k and 228k for a couple.
The Contribution to an IRA can save up to about $5k per couple from today's tax bill, if relevant. However, the advantage of the Roth-IRA, from a long-term investor perspective, maximizes the long-term investment benefits and multiplies them exponentially, especially for young people.
Although the liquidity of this account is low, it is not completely limited.
Withdrawal from the account in less than 5 years will result in a 10% fine and payment of tax on the profits only, but after 5 years, only tax on profits.
There are exceptions for early withdrawal, without penalty and without taxes on the profits, for example for buying a first home or medical services in case of disability.
This is not financial or tax advice, these are just shared data and thoughts, like a recipe for Picanha.
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