Or IRAs Independent Retirement Accounts. Capital Gains are taxes on earnings from investments This is considered income.
Post on 29-Dec-2015
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Or IRAs
Independent Retirement Accounts
Capital Gains are taxes on earnings from investments
This is considered income
This includes: Interest on bonds Dividend
payments Capital gain when
you sell a stock for a profit
Even the interest you earn on a saving account
This means you put-off paying taxes until later.
When you do this, you end up with more.
2 Big Benefits: You end up with
more You benefit now
because your contribution is a tax deduction.
An IRA is not an investment. It is just a signal to the IRS (Internal Revenue Service) not to tax until later.
You can invest in stocks, bonds, or mutual funds THROUGH an IRA.
When you give a 1,000 dollars to charity or contribute 1,000 dollars to an IRA, the government considers your salary 1,000 dollars lower when it computes your tax.
Your Salary – 10,000 The tax-rate - 10% Your tax bill – 1,000
BUTYou contribute 1,000 dollars to an IRA
Your salary – 9,000Tax-rate – 10%Your tax bill - 900
Pro Pay less
taxes now End up with
more when you pay taxes later
Con Cannot get
to the money until you are 60-years-old
Enter Senator William Roth and the ROTH IRA.
In 1998, the government created a new IRA that is very attractive
Pro NO CAPITAL
GAINS taxes at the end
This means you will end up with more than a traditional IRA
You can take out the principal at any time for 1st time home purchase
Con No current tax
deduction
If your parents are saving money for you.
They could create a Roth IRA and then give you the money tax-free when THEY turn 60!!!!!!!
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