As we approach the end of 2020, it`s important to start planning for the upcoming tax season. One way to maximize your tax savings is by contributing to a Fidelity Simple IRA, which allows for salary reductions that are tax-deductible.
The first step in contributing to a Fidelity Simple IRA is to complete a salary reduction agreement. This agreement specifies the amount you want to have withheld from your paycheck, up to the annual contribution limit of $13,500 for 2020 (with an additional catch-up contribution of $3,000 if you`re age 50 or older).
It`s important to note that contributions to a Simple IRA are subject to certain employer requirements. If you`re self-employed, you can contribute up to 25% of your net self-employment income (up to the annual contribution limit) to your Simple IRA.
Once you`ve completed your salary reduction agreement, Fidelity will handle the rest. They`ll deduct the amount you specified from each paycheck and deposit it into your Simple IRA account. These contributions are tax-deductible, meaning they`ll lower your taxable income for the year.
Contributing to a Simple IRA not only lowers your tax bill, but it also helps you save for retirement. The earlier you start contributing, the more time your money has to grow. Plus, Fidelity offers a wide range of investment options to help you achieve your retirement goals.
If you`re considering contributing to a Fidelity Simple IRA in 2020, now is the time to act. The deadline for setting up a Simple IRA for the current tax year is October 1st, so don`t delay. Contact Fidelity today to get started and take advantage of this valuable tax-saving opportunity.
