Another Fun Money Tip

So, there appear to be a number of my friends who like to give Uncle Sam and their local taxing authorities a bunch of money over the course of the year, trusting the .gov to maintain their savings account, and who are pleasantly surprised by how much money they get back in the Spring. Personally, I'd rather not do that, but there is a year-end tax strategy one can use to increase the amount  of your own money refunded money the nice man saved for you that you receive.

(consider this a generic disclaimer about YMMV based on your AGI) For every $100 that you put into an IRA before April 15th, you will receive a credit on your federal and state returns equal to the percentage of the marginal tax bracket you fall into. Doesn't that sound funny? Whoops, I just fell into a tax bracket, twisted my ankle! So, if your marginal tax rate is, for example 15%, you'll get $15 more in your refund check for every $100 you put into an IRA.

If, and I know that this is a big if for some folks, you have some money you have managed to save without the help of the lovely folks at the IRS, putting it in an IRA before the 15th of April designated for the previous tax year will get you more money back from your "savings account." It also has the double-plus-good advantage of also being saved for your retirement someday.

Statistics tell us that few people in this country are maxing out their 401Ks and IRAs, so at least the strategy is potentially available for many. In a practical sense, perhaps not.