There’s still time to save on 2014 taxes—hurry, hurry—by opening an IRA for that year. The deadline is April 15 for setting up an IRA, and the contributions must be made by that date, too. Even a filing extension won’t change the deadline. That’s when nondeductible contributions to a regular IRA and for a Roth IRA are due, too. Contributions to both are limited to $5,500, or $6,500 for those 50 and older. (The limits are unchanged for 2015.)

It IS too late, though, to set up employer plans like Keoghs; they had to be established by December 31 of last year in order to deduct contributions for 2014. But it’s still possible for a self-employed individual to open a SEP by the filing due date for the 1040 plus any extensions. The SEP has the same cap for pay-ins: 20 percent of net self-employment earnings—that is, the net profit reported on the Schedule C less half of one’s SECA tax liability.

And it’s not too soon to get a jump on next year’s deductions. Set up a Keogh now, if you are eligible, even with a modest contribution. And an early contribution to an IRA will have more time to gather earnings and appreciate.

For nearly 30 years, Mike Nickerson has owned and managed a small, full-service accounting practice in the Midcoast. He holds a bachelor's degree in accounting from University of Southern Main and a master's degree in financial planning from Bentley University.

He is a past board member and president of the Maine Society of Certified Public Accountants and currently serves on the Maine Board of Accountancy.

An aged rock musician, Nickerson now finds musical enjoyment playing upright and electric bass in a variety of bands spanning folk to jazz music genres. He and his wife have three grown children, and they enjoy their free time hiking, kayaking, golfing, bicycling and motorcycling.

http://www.nickersonpa.com/