Cornerstone is pleased to bring you this information by Ed Slott and Company, LLC. As a member of Ed Slott’s Elite IRA Advisor GroupTM Gordon keeps Cornerstone professionals on the cutting-edge of retirement planning, tax law, and IRA distribution strategies. Through continuous training with Ed Slott and his team of IRA Experts, we receive real-time updates on tax code changes and retirement planning regulations, and access to specialized guidance for complex cases. This is just one of the tools in our arsenal to help Cornerstone clients avoid unnecessary taxes and fees!
A Smart Strategy for Retirement Savings
If you’re expecting a tax refund, it’s tempting to spend it on something fun. But, there are ways to put it to work to strengthen your financial future.
One smart way to use it? Contribute to an IRA—boosting your retirement savings while potentially reducing your tax burden. If you’re already retired, your refund could help fund a Roth IRA for a child or grandchild, helping set them up for long-term financial success.
The deadline to contribute for the 2024 tax year is April 15, 2025.
Contribution Limits
For 2024 and 2025, you can contribute up to:
- $7,000 if you’re under 50
- $8,000 if you’re 50 or older
Your tax refund can be deposited directly into your IRA or even split among multiple retirement accounts.
- A refund going to only one account can be done directly on IRS Form 1040.
- Prepare IRS Form 8888, found on www.irs.gov, to direct the refund to up to three accounts. Pay close attention to IRS guidelines to avoid any common errors.
- If the IRS adjusts your refund amount (due to math errors or past-due taxes), it could impact the deposit amount.
- If your IRA deposit is meant for the prior tax year, confirm with your financial institution that they’ve coded it correctly.
Once your refund is deposited, verify:
- The funds arrived in the correct account
- The deposit was coded for the correct tax year (if applicable)
- Any IRS adjustments haven’t affected your contribution plan
If there’s an issue, you may need to work with your financial institution or even file an amended return.
As always, give us a call if you have any questions!
NOT A CORNERSTONE CLIENT?
A tax refund can be an easy way to increase your own retirement savings or contribute to the next generation’s financial stability. At Cornerstone, our advisors specialize in helping clients navigate tax concerns as part of their comprehensive financial plan and make the most of every opportunity. From strategic planning to personalized guidance, we’re here to help ensure your money is working toward your goals!
Schedule a strategy session today!
Call SIOUX FALLS at 605-357-8553
Call HURON at 605-352-9490
Or email cfsteam@mycfsgroup.com
This information, developed in part by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. Changes in tax laws or regulations may occur at any time and could substantially impact your situation. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
Reprinted with permission. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Raymond James is not affiliated and does not endorse Ed Slott and Company, LLC. Source: © 2025 Ed Slott and Company, LLC.
