Money Matters: Tax filing time: There is still time to add to retirement

The start of a new year not only brings the Internal Revenue patiently waiting for their tax returns, but it also brings one more opportunity to add to your retirement. Generally, at the drop of Time Square's New-Year's crystal ball, the opportunity to do any additional tax planning for last year ends as well. An exception is the ability to still add to your retirement by funding a Retirement Account.

Deadlines still exist for your contributions and must be met, or you may have to amend your return. You have until April 16th this year to fund a contribution for 2006 to your Individual Retirement Account. For contributions to SEP plans, qualified defined benefit plans, or qualified defined contribution plans, the contribution deadline is your return due date plus extension if filed.

The following table outlines the maximum contributions for 2006.

If you are short on cash but expect a refund when you file your return, there is still a way to contribute to your retirement. You can increase your refund on your return by claiming the 2006 retirement contribution even though you have not made the contribution. You must file your return early so there is time for you to receive your refund prior to the original due date of the return. Once the refund is received, you can then fund your retirement contribution. As long as the contribution is made timely, the fact that it is made after you filed your return does not matter. Both the return and contribution have to be filed prior to the due date.

If you are in your twenties or thirties and are not going to add to your retirement, you are missing a tremendous opportunity. The appreciated value of a contribution made today could be worth many times the original contribution. You should not miss a golden opportunity.

HOW TO REACH THE WRITER
Would you like a response to a financial question? Send your question to Doug Horn, 115 W. Broadway, Maryville TN 37801. Be sure to mark your envelope Money Matters.

Doug Horn, CFP, is an area financial planner with more than 21 years financial experience and founder of Quality Financial Concepts, located in downtown Maryville on Broadway.

Doug Horn, CFP, Registered Investment Advisor in Tennessee and Texas and Registered Principal, Branch Office of and Securities offered through CUE Financial, Member NASD, IPC.