Can a Roth Really Help You Lower Your Taxes?

Wooden,Blocks,With,Text,Roth.,Business,And,Finance,Concept.

Patience is a virtue, but will it save you money on taxes? That depends on the situation, but if you’re talking about a Roth IRA, then the answer is typically yes. Traditional IRAs will usually give you an immediate tax savings, while a Roth IRA won’t. However, for those who have patience, a Roth can be a great tax saver in the years to come.

Because the IRS doesn’t give you an immediate tax deduction you are essentially being forced to use your own after-tax income to build your retirement account. The benefit of a Roth IRA over a traditional IRA is that when it comes time to withdraw the money you can take it all tax-free. With a traditional IRA you will be taxed on that income when you withdraw it.

That means your Roth IRA could give you a big boost. Any gains your account has made can be withdrawn tax-free so long as you have had the account for at least five years and as long as you don’t withdraw the money before the age of 59-1/2. There is one other tax-related benefit to Roth IRAs in some cases, and it is an upfront tax break. Some low- or middle-income earners can use what’s called a Saver’s Credit, which allows them to receive a 10-50 percent tax savings on the first $2,000 they put in their retirement account. This goes for 401k plans, as well as both traditional and Roth IRAs.

So there you have it. When it comes to taxes and Roth IRAs, patience is indeed a virtue. Click here to contact us and learn about other tax savings and retirement tips, or give us a call at 1-877-CPA-2006.

Posted in
Jason Ma on Shaping Next-Gen Leaders

Jason Ma on Shaping Next-Gen Leaders

Jason Ma Discusses Shaping Next-Gen Leaders on Alan Olsen‘s The American Dreams Show Transcript of American Dreams interview titled; “Mentoring The Next Generation“ Transcript: Alan Olsen Welcome to American Dreams. My guest today is Jason Ma. Jason, welcome to today’s program.   Jason Ma Thank you so much for inviting. It’s an honor and pleasure…

Austin Fowler on The Power of Quantum Computing and Ethical Investing

Austin Fowler on The Power of Quantum Computing and Ethical Investing

Austin Fowler Discusses The Power of Quantum Computing and Social Investing on Alan Olsen‘s American Dreams Show., episode  Transcript of American Dreams interview titled; “Empowering Financial Growth and Social Impact with Austin Fowler“. Alan Olsen Hi, this is Alan Olsen and welcome to American communities. My guest today is Austin Fowler. Austin. Welcome to today’s…

Successful Entrepreneurs Share 9 Essential Qualities

Successful Entrepreneurs Share Unique Qualities In the dynamic landscape of business, entrepreneurship stands as a beacon of innovation and change. Behind every successful venture lies an individual with a unique blend of qualities that propel them toward success. Whether it’s a tech startup disrupting an industry or a small local business thriving in a competitive…

Tom Wheelwright Talks Tax Free Wealth

Tom Wheelwright Talks Tax Free Wealth

Tom Wheelwright sits down with Alan Olsen, Host of the American Dreams show to discuss tax free wealth. Transcript: Alan Olsen Welcome to America Dreams. My guest today is Tom wheelwright CPA, Tom, welcome to today’s show. Tom Wheelwright Thanks, Alan. It’s really always good to be with you. Alan Olsen I am really excited…