Can a Roth Really Help You Lower Your Taxes?
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 Any gains your account has made can be withdrawn tax-free so long as you have had the account for at least five years and as long as you don’t withdraw the money before the age of 59-1/2.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.
American Dreams Impact Legacy Conference
American Dreams Impact Legacy Conference 2023 Unlock the secrets to building multi-generational wealth and intentional family legacies on September 19th at 10 AM PST. Dive deep into understanding the importance of crafting your family’s legacy with intent, rather than leaving it to chance. This event is your chance to gain insights from leaders who’ve mastered…
Intersection of Law and AI with Paul Callister
This week Host Alan Olsen interviews Paul Callister, a dynamic individual with a diverse background, takes us on a journey through his educational path from chemical engineering to philosophy, followed by his transition from practicing law to becoming a law librarian and professor. As a former attorney in a family law firm, Paul sought to…
Growing Your Business Mindset with Ruben Resendez, President of adHere, Inc
Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Ruben Resendez. Ruben. Welcome to the show. Ruben Resendez A thank you so much, Alan, so Good seeing you again. Alan Olsen So Ruben, you have a very unique background and one that you’ve accomplished a lot within…
Democratizing Creativity: Dan Gedman and the Impact of Technology in Filmmaking
Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. I’m busy here today with Dan Gedman. Dan, welcome to today’s show. Thank you. So Dan, you have a lot of great experience of diverse industries. And, you know, in American Dreams, we’re all about problem solvers have people’s path in life…