Self-Employed End of Year Retirement Tips Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxBlogTeam Published Dec 20, 2021 - [Updated Dec 7, 2022] 2 min read Reviewed by Lisa Greene-Lewis, CPA and tax expert for TurboTax Contributing to your retirement account is one of the best ways to reduce your taxable income and increase your potential tax refund. While some retirement accounts have year-end deadlines for contributions and required distributions, others give you extra time to make deposits that will count toward tax year 2022. Check out these end of year moves that will qualify you for tax savings! For Those Who Work As An Employee Make 401(k) contributions There may be no better investment than tax-deferred retirement accounts. They can grow to a substantial sum because the interest compounds over time, free of taxes. If you’re able, max out your 401(k) contribution before year-end ($20,500 maximum allowed for 2022 , $26,500 if you are age 50 or over = the $19,500 regular limit for the tax year plus the $6,500 catch-up limit for 2022), so that you can lower your taxable income and make the most of your retirement. Use the time for IRA contributions In addition to your 401(k), consider contributing to an Individual Retirement Account (IRA), as well. You have until April 18, 2023 to make IRA contributions for 2022 and make an impact on your 2022 taxes. However, the sooner you get your money into the account, the sooner it has the potential to start growing. Making tax-deductible contributions also reduces your taxable income for the 2022 tax year. You can contribute a maximum of $6,000 to an IRA for 2022, plus an extra $1,000 if you are 50 or older. For Those Who Are Self-Employed Simplified Employee Pension (SEP) IRA If you are self-employed, you can contribute to a Simplified Employee Pension (SEP) IRA as much as the lesser of 25% of your net earnings or up to $61,000 for 2022, and your contributions may be tax-deductible as a business expense if you file and extension by April 18 and contribute before the October 16th extension deadline. For Those Who Work as an Employee or Self-Employed Qualify for the Saver’s Credit There’s another plus to contributing to your retirement. You may automatically be eligible for the Saver’s Credit worth up to $1,000 ($2,000 married filing jointly) just for contributing to your retirement account. The Saver’s Credit can be claimed for your contributions to a 401k, 403(b), 457 plan, a Simple IRA or a SEP IRA. Your contributions to a traditional IRA or a Roth IRA are also eligible for the Saver’s Credit. We’ve Got You Covered Don’t worry about knowing these tax rules. You can come to TurboTax and fully hand your taxes over to a TurboTax Live Full Service tax expert who can prepare your taxes from start to finish in one meeting. TurboTax Live Full Service tax experts are available year-round in English and Spanish. Previous Post 6 Money Saving Tax Tips for the Self-Employed Next Post So You Made Money On Social Media? Written by TurboTaxBlogTeam More from TurboTaxBlogTeam One response to “End of Year Retirement Tips” Great blog, I would like to add that In case your employer is not offering you a retirement plan, you can make a contribution to a traditional individual retirement account or a Roth IRA. The former would be offering a tax deduction for the year the contribution is made, but both will offer tax-deferred gains..Thanks again for this timely read Reply Leave a ReplyCancel reply Browse Related Articles 401K, IRA, Stocks Tax-Wise Retirement Planning Tax Deductions and Credits Can You Deduct 401K Savings From Your Taxes? Tax Refunds How to Use Your Tax Refund to Boost Your Retirement Sav… Tax Tips Should You Contribute to a Roth IRA, Traditional IRA or… 401K, IRA, Stocks IRA vs 401(k): Exploring the Key Differences 401K, IRA, Stocks Using Your 401k to Reduce Taxable Income Income and Investments 8 Ways to Fund Your Retirement in 2020 Income and Investments Small Business Retirement Plans for the End of Year 401K, IRA, Stocks I Started a 401K This Year. What Do I Need to Know When… Taxes 101 How is Your Retirement Savings Taxed?