The middle of April is fast approaching and everyone knows what that means - time to get those 2011 income tax returns filled out and filed.
What few people realize is that they also have until Monday, April 16, to open a new individual retirement account (IRA) for 2011 or make your annual contribution to an existing one.
With the limit for contributions this year set at $5,000 - or $6,000 for those over age 50 - putting cash in a regular or Roth IRA can shave a big chunk off your personal tax bill.
In addition, this year you may also be eligible for a special "Savers Credit" of up to $1,000 for contributions to either an IRA or an employer-sponsored retirement plan.
I like getting added deductions or credits for putting my money in my retirement plan, if only because I'm a big fan of giving the government the least amount of cash I can legally get away with.
I can't, however, say whether such contributions are right for you - your accountant or tax adviser will have to help you with that decision.
What I can say is this...
If you do put money in a pension plan, whether self-directed through a custodial agent or via an employer-sponsored plan, make sure you know exactly where your money is going - and who's really managing it once it gets there.