Age is more than just a number when you’re filing your taxes. Yes, consider your age when filing — and here’s why.
In today’s episode of Your Money Minute with Tracy Stewart, CPA, I want to share a few ways age matters when filing your income taxes.
First, if you’re over the age of 50, you can sock away additional money in your retirement savings accounts through a catch up contribution. I highly recommend this because investing in your future is the quickest way to develop financial independence.
Another consideration is for those over 65 filing a standard deduction. You’re a little older, a little wiser, and you may qualify for an additional refund amount. Age (and wisdom) trumps all, right? Check with your tax professional to get all of the details.
Finally, if you’re under the age of 59 and 1/2, I encourage you to think twice before making any withdrawals from your IRA — as you’ll pay a 10% penalty above and beyond the standard income tax rate on this money. Yes, there are exceptions — but talk with a knowledgeable tax professional to know what qualifies. My best advice? Only touch this money if you ABSOLUTELY have to, otherwise you’re taking from your future — and that’s never a good bet.
Financial independence is unbelievably liberating. Understanding how your age impacts taxes can give you a peace of mind and confidence to make the most of your finances during this time of year.
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