Tax Refunds & Advice

If you are saving for retirement, and you probably should be, you need to be aware of the maximum dollar limit that is attached to your particular type of retirement account(s). This is important to know because you can only contribute so much money to each type of account during a given year. To go along with this, the amount that you contribute will have an effect on your taxes as well.

Below are some of the most common retirement plan limits for 2009:

SEP IRA: $49,000
SIMPLE IRA: $11,500 or $14,000 if 50 or older
Roth or Traditional IRA: $5,000 or $6,000 if 50 or older
457 plan: $16,500 or $22,000 if 50 or older
401(k) plan: $16,500 or $22,000 if 50 or older
403(b) plan: $16,500 or $22,000 if 50 or older
Defined Contribution Pension: $49,000
Defined Benefit Pension: $195,000

It is important to note that you can fund both a Roth and Traditional IRA but the total contribution cannot exceed $5,000 (or $6,000 if 50 or older) combined.

As you know, the IRS changes the retirement plan limits every year. What you were allowed to contribute last year may not be the same this time around. And when 2010 arrives it is safe to say that there will be new changes to keep in mind.

There is a good chance that you invest in one of the retirement plans listed above. If so, you should know the limits and what effect your contributions will have on your tax situation. 

If you are over the age of 60, you may qualify for the AARP Tax-Aide program. This service offers free counseling and tax preparation to thousands of individuals over the age of 60. As you can imagine, it would be nice to take advantage of this offer. Not only could you ensure that your taxes are filed correctly, but you can do so without spending any money.

How is it possible for AARP to offer this service? The only way is through the help and dedication of more than 30,000 volunteers. With so many professionals volunteering across the country, it makes it easy for qualified individuals to find somebody in their area who can help.

The question is: do you automatically qualify for the Tax-Aide just because you are over the age of 60? The simple answer to this question is no. Generally speaking, the Tax-Aide program caters to low and middle income individuals and families. If you fit this mold, you will have a much better chance of qualifying for Tax-Aide.

If you are over the age of 60 and interested in learning more about the Tax-Aide program, visit the AARP website. It offers information on Tax-Aide, as well as locations in your area that can supply further details.

With the help of thousands of volunteers, millions of people have received free tax help over the years. If you think that you may qualify for the Tax-Aide program, make sure that you look into this sooner rather than later.