Author Topic: Last-minute tax-deductible investment for 2014?  (Read 2948 times)

Grigory

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Last-minute tax-deductible investment for 2014?
« on: March 07, 2015, 09:39:06 AM »
Last year, I've invested the maximum allowed amount in my Roth IRA and traditional IRA, then invested as much as my employer would allow into their 401(k), and I still have cash left over. (Awful, I know! :-P )

Question: is there some other investing account I'm not familiar with where I can invest some money now (i.e., before the April 15th deadline) and use it as a tax deduction for 2014?

Thanks in advance! :^D

ender

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Re: Last-minute tax-deductible investment for 2014?
« Reply #1 on: March 07, 2015, 11:31:16 AM »
Last year, I've invested the maximum allowed amount in my Roth IRA and traditional IRA

I hope you only did a total of $5500 between the two of them..

Grigory

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Re: Last-minute tax-deductible investment for 2014?
« Reply #2 on: March 07, 2015, 03:18:40 PM »
Last year, I've invested the maximum allowed amount in my Roth IRA and traditional IRA

I hope you only did a total of $5500 between the two of them..
Yup.

a1smith

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Re: Last-minute tax-deductible investment for 2014?
« Reply #3 on: March 07, 2015, 03:54:39 PM »
If you have children you can set up 529 accounts for them to save for their college expenses.  While the contributions are not Federally deductible they are deductible in some states, usually with conditions and limits.  For example, they might require that you use the state ran 529 to get tax deduction and usually limit the tax deduction to a certain contribution level.

a1smith

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Re: Last-minute tax-deductible investment for 2014?
« Reply #4 on: March 07, 2015, 03:58:39 PM »
Also, the earnings in 529 are tax free if used for qualified educational expenses.

Here is the site for Florida's 529.  http://www.myfloridaprepaid.com/what-we-offer/529-savings-plan/

a1smith

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Re: Last-minute tax-deductible investment for 2014?
« Reply #5 on: March 07, 2015, 04:02:16 PM »
Well, since Florida has no state income tax you only benefit from the tax free growth of the account.

a1smith

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Re: Last-minute tax-deductible investment for 2014?
« Reply #6 on: March 07, 2015, 04:09:09 PM »
If you look at the expense ratios for the investments available in Florida's 529 you will see they are on the high side (about 0.7%).  Since you don't get any state tax deduction for contributions (no state tax) you should shop around and find another 529 that has lower fees.

See http://www.itppv.com/documents/pdf/investment/investment-disclosure-statement.pdf

Grigory

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Re: Last-minute tax-deductible investment for 2014?
« Reply #7 on: March 07, 2015, 08:58:16 PM »
Sorry - I should have added more details in my original post. I'm a bachelor and I have no kids, so basically I'm the guy that gets to pay all the taxes haha. (No 529's for me.)

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Re: Last-minute tax-deductible investment for 2014?
« Reply #8 on: March 10, 2015, 02:52:38 PM »
I'm not sure you can still open an HSA account for 2014, but that's another tax-avoiding investment vehicle you could look into.  Yes, it's a Health Savings Account and it's intended to be used to cover out of pocket medical expenses.  But, even a young person can put about $3000 tax-deferred into an HSA each year -- and then invest that money just like you would funds in an IRA.

Go to irs.gov and double check this.  But I'm pretty sure I am right.

a1smith

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Re: Last-minute tax-deductible investment for 2014?
« Reply #9 on: March 10, 2015, 08:00:39 PM »
With HSA's the contribution deadline is similar to IRA's; you have until April 15, 2015 to make 2014 contributions.  To open an HSA you have to be in a CDHP (consumer driven health plan), formerly called HDHP (high deductible health plan).  However, I'm not sure if this extension applies if the HSA account did not exist in 2014.

Also, I'm guessing that if you want to make 2014 contributions you should have been in CDHP during 2014.