Don't Forget Your IRA Contributions

Contributions to a traditional or Roth IRA must happen by April 15th, 2005, for your 2004 taxes.

Consider making a contribution to a traditional IRA. If you need to save money on your tax bill, one of the best last-minute strategies is to contribute money to a traditional IRA. You contribution to a traditional IRA reduces your taxable income, and can cut your tax bill by $300 or more, depending on your tax bracket.

Consider making a contribution to a Roth IRA. If you don't need to cut your tax bill, or if you are not eligible for a traditional IRA, then consider making a contribution to a Roth IRA. Unlike a traditional IRA, a Roth IRA is not tax-deductible. Instead, your savings grow tax-free until you withdraw the funds. Your withdrawal will be tax-free as well, if you follow the rules for withdrawing money from your Roth. The tax-free aspects of the Roth IRA can translate into serious tax savings for long-term investors.