I have more income this year than usual and I need to find a way to tax shelter some of it. I don't have an IRA, but I'm thinking I should get one before the new year. What is the best way to do this? Also, can I still have a Solo 401(K)

ANSWER

The BIDaWIZ Team's Answer:

If you'd like a tax deduction by contributing to an IRA, then you will need to contribute up to $5,500 to a traditional IRA ($6,500 if you're 50 or older). However, if you're a single filer, then the amount you can deduct becomes limited if your adjusted gross income is $59,000 or more for 2013. If you're married filing jointly, then the amount you can deduct becomes limited if your adjusted gross income is $95,000 or more. Do you have an estimate for your adjusted gross income for the year? In terms of deadlines, you have until Tuesday, April 15, 2014 to open and contribute to an IRA. In the past, we mentioned the advantages of a Solo 401(K). Did you start one? You can contribute up to $17,500 ($23,000 if you are 50 or older) plus up to 20 percent of your net self-employment income, up to a maximum contribution of $51,000 for 2013. You have until April 15, 2014, to make contributions for 2013, but you have to open the account by December 31st if you don't already have one.