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 Any gains your account has made can be withdrawn tax-free so long as you have had the account for at least five years and as long as you don’t withdraw the money before the age of 59-1/2.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
Australian Sports and Best Practices: Insights from Ian Robilliard

Australian Sports and Best Practices: Insights from Ian Robilliard

Introduction of Interview with Australian Sports legend Ian Robilliard In this interview, Alan Olsen discusses with Ian Robilliard Australian sports and best practices and coaching insights Transcript: Alan Olsen Welcome to American Dreams My guest today is Ian Robilliard. Ian, welcome to today’s show.   Ian Robilliard Thanks very much Alan. Really lovely to be…

The Tech Entrepreneur – Cory Warfield

The Tech Entrepreneur – Cory Warfield

Introduction: The Tech Entrepreneur, Cory Warfield shares business insights In this interview, Alan Olsen discusses success and achievements with Cory Warfield, famed tech entrepreneur. Transcript (software generated) Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Corey Warfield. Corey, welcome to today’s show. Cory Warfield Thanks so much…

Raising Children (and Grandchildren) in a Digital Age

Raising Healthy Children (and Grandchildren) in a Digital Age

Balancing Screen Time and Family Time. Written by Nathan Weller. The digital age has brought about significant shifts in society, perhaps the most important is how children are raised; especially how young people interact with technology. With the prevalence of smartphones, tablets, televisions, and computers, screens have become a ubiquitous part of our lives. Children…

Revolutionizing Athlete Development, Shona Eichorn CEO of NIAS

Revolutionizing Athlete Development, Shona Eichorn CEO of NIAS

Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams we have today Shona Eichorn. She is the CEO of the Northern inland Academy of Sports. Shona, welcome to today’s show. Shona Eichorn Thank you very much for having me. I’ve very privileged to be with you all. Alan Olsen So Shona,…