Max out of IRA

One must not forget to get the maximum out your IRA or other retirement plan contributions. Of course, by doing so you're assuming that your personal income will be lower when you withdraw the money. While that may or may not be the case, it’s safe to say that, if there are a number of years until you start taking distributions, the tax laws will likely change many times over between now and then — hopefully in your favor.

The Individual Retirement Account (IRA) was once a popular tax deductible way to save for retirement but lost much of its lustre after Congress tightened eligibility requirements in the 1986 tax law. But since the 1997 tax law changes took effect and it is worth to consider this option. Both you and your spouse can take a tax deduction on your tax return for contributions to a regular IRA of up to $4,000 ($5,000 if age 50 or over) or 100% (whichever is less) of wage, salary, or self employment taxable earnings if neither of you have retirement plan coverage at work. Taxable alimony is included for the purposes of determining taxable earnings. You have until April 15, 2007 to make your 2006 IRA contributions. You must make your contributions by this deadline even if you get an extension to file your tax return.