One of the most popular topics during tax season is finding the best way to save money. Well, one of the best ways to do that is with an IRA—Individual Retirement Account. It is a financial investment tool that helps you save money for retirement with tax-free growth. Whether it’s Traditional IRA or Roth IRA, those under 50 can save up to $5,500 and those 50 and older can save up to $6,500. Withdrawals are penalty free, starting at age 59½.
How can IRA help you save money and get more tax refunds?
The government provides subsidies based on your taxable income. The IRS works with health insurance marketplaces such as Covered California to check your tax returns and calculate how much subsidies you would receive. For example, if you deposit $5,000 into your IRA, then your taxable income would decrease by $5,000, and you would receive more subsidies to pay for your health insurance, and tax credits will be returned to you.
Upgrade your health coverage and save money
The benefit of opening an IRA is that you save so much money! The same goes for next year’s plan. You can upgrade plans and save money!
Mr. Wang has a family of four. In 2015, his annual income was $65,000. In January, he enrolled in the Blue Shield Sliver 70 plan through Covered California. After government subsidies, the family premium was $494.
KCAL Insurance Agency agents helped Mr. and Mrs. Wang open an IRA with a $5,000 deposit each, and the total taxable income reduced by $10,000. In 2016, their health insurance plan was also upgraded to Blue Shield Silver 73 plan, with better benefits. The family premium is now $353, saving $141.
Many people might go directly to the bank to open an IRA. However, if you are a KCAL Insurance Agency client, you can open an account with KCAL. We carry IRA products from A-rated insurance companies and can help you get in contact with Covered California to upgrade your health insurance plan. The deadline to file your taxes is April 18, so if you want to open an IRA to save on taxes, take action now! Time is ticking~