Tax Freedom Day and Some Homework

Happy Tax Freedom Day! In case you weren’t aware, the average American will spend 99 days working to pay their 2010 tax bill. That makes today, April 9th, Tax Freedom Day. In reality, Tax Freedom Day varies from state to state, with Alaska being the earliest (March 26th) and Connecticut being the latest (April 27th).

And now for your homework…

As you’re no doubt aware, your income tax return is due next Thursday. That means you have just under a week left to fund an IRA for 2009. If you haven’t already done so, and if you scrape together enough money to make it happen, then please set aside some time this weekend to do it.

If you’re concerned about not being able to swing the contribution amount without tapping into your short-term savings, keep in mind that you can withdraw Roth IRA contributions without paying a penalty whenever, and for whatever reason, you want.

While withdrawing your contributions would negate the contribution in the first place, there’s a good chance that you’ll get those short-term savings rebuilt before anything bad happens, and you’ll then be one step ahead.

Speaking of contributions, here are some details on contribution limits:

If you’re not sure where or how to open an IRA, I would recommend that you start by checking out the following pages from Vanguard and/or Fidelity. I personally prefer Vanguard, but we also have some money with Fidelity and have had a good experience with them, as well.

That’s it. Go. Do it. And have a great weekend!

2 Responses to “Tax Freedom Day and Some Homework”

  1. Anonymous

    I get the point of the sentiment, but is it really meaningful to calculate a Tax Freedom Day for the ‘average’ American when it’s just been reported that this year, 47% of adults have zero federal tax liability?

    Having said that, we’re probably pretty average. 25% of our income ultimately goes to income/payroll taxes. Throw in another handful of days for sales and property taxes, and we’re right around the estimated day.

  2. Anonymous

    This is one case where I wish I was average. Sad to say, but I have a ways to go before I hit my tax freedom day. Happy tax freedom day to the rest of you. I’ll have to wear my chains a little longer.

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