Make these last-minute moves to qualify for important retirement savings tax breaks

The end of the year has a variety of retirement planning deadlines you need to meet in order to qualify for tax deductions and credits. Retirees also need to take action by specific dates to avoid retirement account penalties. Here are some of the retirement planning moves you need to make before next year:

Make last-minute 401(k) contributions. All 401(k) contributions are typically due by the end of the calendar year. Employees can contribute up to $18,000 to a 401(k) account in 2015. Workers age 50 and older can make catch-up contributions worth an additional $6,000, or a total of $24,000 in 2015, which are also due by Dec. 31. An investor over age 50 who is in the 25 percent tax bracket and maxes out his traditional 401(k) will save $6,000 on his federal income tax bill.

Take required minimum distributions. Retirees born before July 1, 1945, are required to take distributions from their individual retirement accounts and 401(k) plans by Dec. 31, 2015. Retirees who delay their first required minimum distribution will need to take two distributions in the same year.

Extra time for IRA contributions. You have until April 15, 2016, to contribute up to $5,500 to an IRA that can be applied to tax year 2015. Workers age 50 and older are eligible to contribute an additional $1,000, for a total contribution of $6,500 in 2015.

Claim the saver’s credit. If your adjusted gross is below $30,500 for individuals, $45,750 for heads of household and $61,000 for couples in 2015 and you contribute to a 401(k) or IRA, you may be able to qualify for the saver’s credit. This valuable tax credit is worth between 10 and 50 percent of the amount you contribute to a retirement account.

Federal Tax Day – year 2016 Inflation Adjustments for Pension Plans, Retirement Accounts Released.

The 2016 cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions have been released by the IRS. In general, many of the pension plan limitations will change for 2016 because the increase in the cost-of-living index due to inflation met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged.

The adjusted gross income (AGI) phaseout range for taxpayers making contributions to an IRA or a Roth IRA has increased, as have the AGI phaseout ranges for the retirement savings contributions credit.

The deduction for an IRA contributor not covered by a workplace retirement plan, but is married to someone who is covered, is phased out if the couple’s income is between $184,000 and $194,000.

The phaseout range for taxpayers making contributions to a Roth IRA is $184,000 to $194,000 for married couples filing jointly. For singles and head of household, the phaseout range is $117,000 to $132,000.

The AGI limit for the saver’s credit for low-and-moderate income workers is $61,500 for married couples filing jointly, $46,125 for head of household and $30,750 for singles and separate filers.