What does the basic process entail?
An income tax refund can be directly deposited to an IRA up to the annual contribution limit. The contribution limit is $5,500 ($6,500 for individuals age 50 or older) for 2016 and 2017. It can also be split among multiple accounts.
— Determine the tax refund amount. Once you know how big your refund will be, decide how much, if any, you would like to contribute to your IRA or Roth IRA up to the maximum annual contribution allowed.
Tax season is now in full swing. As you finish preparing your own return for this year, you may find that you have to cough up some extra cash to Uncle Sam. On the other hand, maybe you were too generous with Uncle Sam last year, and he owes you a tax refund. If that’s the case and you’re like most people, you’ve probably already spent that check before it arrives in the mail. But before you go out and buy that new flat screen TV – or whatever is you’ve earmarked your refund for – here are 5 ways you might consider using this year’s refund instead.