The Skinny on Tax-Deferred Retirement Accounts
Just about anyone could benefit from a tax-differed retirement account. These accounts, most commonly known as 401Ks or IRAs, are a great way to save for retirement and in many cases save on taxes. The real question is when do you plan on cashing out that retirement fund? While you will always see immediate savings in your paycheck by deferring some of your income into a retirement account, the time will eventually come when the taxman comes calling.
However, there are some measures you can take to reduce your tax bill. You can convert your 401K plan, which could save you some money in retirement, rather than leaving the money in the tax-deferred account and withdrawing it later. If you do this then your funds will be taxed at the tax rate during the year you withdraw the funds. On the other hand, when you convert these accounts they will be taxed at the tax rate of the year you convert them. That means if this year’s tax rate will be lower than the normal tax rate when you are retired then now might be a good time to convert your funds to a Roth account.
Each person’s situation will vary and timing is the key to a successful conversion. There are also many variables to keep in mind, which is why it’s a good idea to speak with a certified account or experienced financial planner. At GROCO we can help you with your retirement planning to ensure that you get the most out of your retirement savings and keep your tax bill down. Just click here to contact us for help or call us at 1-877-CPA-2006.
Business in New York Being Buried by Heavy Tax Load
New York, New York: It’s the town so nice they named it twice. But when it comes to taxes in one of the world’s greatest states, things aren’t so nice. That’s because New York is one of the worst places to live if you don’t want to pay a lot of taxes. New York has…
Thinking About Loaning Cash to Your Business?
Are you looking to start a business, or is your current business in need of some cash? Maybe you can’t get a loan from a bank, or maybe you would rather not use a bank. What about lending some of your own money to your company? Can you do that? Yes, you can, but you’ll…
Which Tax Extensions Will Affect Your 2014 Return?
Are You Ready for Your 2014 Taxes? Although many people might answer yes to that question, the fact is taxpayers can only do so much as long as Congress is dragging its feet on several expired tax extenders. The fact that these extenders are still sitting in limbo is nothing new. It happens almost every…
So-Called Temporary Recession Tax Not So Temporary
Remember the great recession of 2009? Although the recession may now be a thing of the past, some so-called “temporary” taxes are having a harder time fading into the background. That’s because many states throughout the country are still collecting on tax bills that were enacted solely for the purpose of refilling public reserves. Fourteen…