December 31st came and went, so now it is time to file your 2012 tax return. You may have plugged the numbers into TurboTax and not liked what you found. Is there any way to reduce your tax liability for 2012 now that we are in 2013? Yes there is!
IRA contributions can be made for the previous year until tax filing day of the current year
You can contribute $5,000 ($6,000 if 50 or older) to a Traditional IRA or Roth IRA for 2012 until April 15th, 2013. This means that if you forgot to contribute to your IRA, you can still do so.
Should I contribute to a Traditional or Roth IRA?
If you want to reduce your tax liability for 2012, then you will need to contribute to a Traditional IRA. Remember, Traditional IRA contributions are tax deductible, while Roth IRA contributions are not, however money will come out of the Roth IRA tax free in retirement. If you are in a low tax bracket, are getting a refund, or your income is too high for a Traditional IRA, you should consider contributing to a Roth IRA. Read more..