This may sound a little strange, but there are actually ways that you can convert your taxable income into non-taxable income. You can also do this without worrying about getting audited by the IRS.
This is one of my favorite ways of dong this: Although this has been a part of our federal income tax code for over 30 years, many people still don’t take advantage of it. So what is it that I am referring to?
The IRA — Individual Retirement Account.
I can hear many of you say right now, “Oh, I know all about that one; what’s so great about an IRA?”? Just give me a little time, and I’ll explain three new benefits that the IRA rules have that you may not know about:
BENEFIT #1: How To Avoid Tax Rather Than Postpone Tax
First. There are actually now two kinds of IRA’s available.
The so-called Traditional IRA is the one that first came out way back in the 1970’s.
But there’s a newer version of the IRA that’s only a few years old. This one is called the Roth IRA. And the difference between these two IRA’s is very significant.
Your traditional IRA contributions are tax-deductible, which result in immediate tax savings. The growth of those contributions is also tax-sheltered while the funds remain in the account, but after some time all tax-deductible Traditional IRA contributions, as well as the growth of those contributions, will be subject to income tax when the money is withdrawn from the account.
In other words, Traditional IRA’s offer the opportunity to temporarily postpone taxes.
On the other hand, the Roth IRA offers the opportunity to permanently avoid taxes. With a Roth IRA, you don’t take a deduction for your contributions; instead, you make a contribution with “after-tax” dollars.
Whatever you put in not only grows tax-free, but can also be withdrawn tax-free.
Let me show you an example to demonstrate what I am saying:
Let’s say that you invest $2,000 per year for 20 years into a Roth IRA. At the end of twety years, you will have invested a total of $40,000. Now if that Roth IRA earns an average of 10% per year, that $40,000 will grow into $126,005.
Here is the interesting part: If we assume that the IRA has existed for at least five years, and you are at least 59 ½ years old, you can withdraw the entire $126,005 without paying tax.
On the other hand, if this money had been invested in a Traditional IRA, the entire $126,005 would be subject to income tax when it is taken out.
The $86,005 of growth is magically converted from taxable income status to non-taxable income status. Let’s assume that you are in the 15% federal tax bracket. You could possibly be saving $12,901. If you add whatever state income tax you might have, you could save over $15,000 in taxes.
BENEFIT #2: You can also take An Extra 3 ½ Months To put money into Your IRA.
The deadline for contributing to your IRA is April 15 of the year AFTER the year for which the contribution made.
So for Year 2015, you have until April 18, 2016 to fund your IRA.
If you’ve already invested the maximum (more about that in a moment) by December 31, 2015, then there is no more to do. You can’t put in any more money into the IRA for 2015, but if you haven’t maxed out your IRA, you have until April 18 to do that.
This brings me to:
BENEFIT #3: The Maximum Contribution Amounts have been increasing f
or many years. The most you could put into an IRA was $2,000. Now, the maximum is $5,500. (This assumes that you have at least that much earned income from wages or self-employment income).
And if you are over 50, you can put in another $1,000, bringing the total maximum to $6,500.
A married couple, both age 50 or older, can put a whopping $13,000 per year into a IRA. Not too bad if I say so myself.
Here is a final point about the Roth IRA rules: For a married couple, you can only contribute the maximum of $5,500 or $6,500 if your combined income is less than $183,000.
If you are single or head of household, you can contribute the maximum if your income is less than $116,000.
For most of us who are considered to be in the middle-class who are looking for a perfectly legal way to permanently avoid tax (rather then merely temporarily postpone tax), the Roth IRA is exactly what we need.
How do you get started on this? Well this is the hard part. Let’s examin how to actually implement this tax avoidance strategy.
“We’d like to save as much as we can for our golden years. But $11,000 a year? It’s hard to put aside that kind of money. We need every dollar we make just to pay the bills.” This could be your situtation, but a tax advisor or fund manager might find it easy to lecture you on why you should do it anyway. Realistically though; You’ve got to begin at some point, and you’ve got to start saving something, don’t you?
If you’d like to save for retirement, but think you can’t, it may be because you need to learn how to budget your money correctly. Also learn about other ways to boost your retirement income, check out this website:
Learn from this resource or other sources and go for it!
Wonderful post! We will be linking to this great post on our website.
Keep up the good writing.
My coder is trying to persuade me to move to .net from PHP.
I have always disliked the idea because of the
costs. But he’s tryiong none the less. I’ve been using
WordPress on several websites for about a
year and am anxious about switching to another platform.
I have heard good things about blogengine.net.
Is there a way I can transfer all my wordpress content into it?
Any kind of help would be greatly appreciated!
Now I am ready to do my breakfast, after having my breakfast coming
again to read other news.
I would like to thnkx for the efforts you’ve put in writing this site.
I am hoping the same high-grade web site post from you in the upcoming also.
Actually your creative writing abilities has encouraged me to get
my own web site now. Really the blogging is spreading
its wings rapidly. Your write up is a great example of it.
We’re a group of volunteers and opening a new scheme in our community.
Your site provided us with helpful info to work on.
You’ve done a formidable job and our entire group will be thankful to you.
I believe you have noted some very interesting details, appreciate
it for the post.
Hi there to every , for the reason that I am genuinely keen of reading this blog’s post to
be updated on a regular basis. It consists of fastidious data.
This post is priceless. When can I find out more?
Very good site you have here but I was curious if you knew of any community
forums that cover the same topics talked about here?
I’d really love to be a part of group where I can get advice from other
experienced individuals that share the same interest. If you have any recommendations,
please let me know. Bless you!
My relatives every time say that I am killing my time here at
web, however I know I am getting knowledge daily by reading
thes good content.
I read this piece off writing fully concerning the difference of most recent
and earlier technologies, it’s remarkzble article.
What i don’t understood is in truth how you’re now
not really a lot more well-favored than you might be
now. You are so intelligent. You know thus considerably
in terms of this subject, made me in my view consider
it from a lot of numerous angles. Its like women and men don’t seem to be interested unless it’s one thing to accomplish with Lady gaga!
Your personal stuffs nice. All the time handle it up!
Informative article, totally what I wanred tto find.
I wanted to check up and allow you to know how really I valued discovering your web
site today. I might consider it a honor to operate at my workplace and be able to use
the tips discussed on your web site and also be involved in visitors’ opinions like this.
Should a position involving guest publisher become on offer
at your end, i highly recommend you let me know.
Very nice article. I certainly appreciate this site.
Stick with it!
Thanks for sharing superb informations. Your wweb site is very cool.
I am impressed by the details that you have on thhis website.
It reveals how nicely you understand this subject. Bookmarked this web page, will come back for more articles.
You, my pal, ROCK! I found simply the information I already
searched all over the place and just couldn’t come across.
What a great site.
I couldn’t refrain from commenting. Very well
written!
It’s very trouble-free to find out any matter on web as
compared to textbooks, as I found this piece of writing at this web page.
Wow, incredible blog layout! How long have you been blogging for?
you make blogging look easy. The overall look of your site is great,
let alone the content!
Does your site have a contact page? I’m
having a tough time locating it but, I’d like to shoot you an email.
I’ve got some ideas for your blog you might be interested in hearing.
Either way, great site and I look forward
to seeing it expand over time.
Thank you a lot for giving everyone such a spectacular opportunity to read
articles and blog posts from here. It is always so lovely and as
well , jam-packed with fun for me and my office friends to
visit your blog at minimum thrice a week to read the latest guidance you have got.
Of course, I am also actually fulfilled for the exceptional creative ideas served
by you. Some two ideas in this posting are in reality the finest I’ve had.
My brother recommended I might like this web site. He was entirely right.
This post actually made my day. You cann’t imagine just how much time
I had spent for this information! Thanks!
Hey There. I found your blog using msn. This is an extremely well written article.
I will be sure to bookmark it and come back to read more of your useful
information. Thanks for the post. I’ll certainly comeback.
I got this website from my buddy who told me regarding this website
and at the moment this time I am visiting this web site and
reading very informative articles or reviews at this place.
You’ve made some good points there. I checked on the internet to find out more about the issue and found most individuals will go
along with your views on this site.
This site was… how do I say it? Relevant!! Finally I have found
something which helped me. Appreciate it!
Mike Tyson.. not Spincks…:-) it doesn’t matter..:-)
Can you tell us more about this? I’d care to find out more details.
Signing up Open an W88 account to experience all our
web-based betting gaming and promotions pleasure of top
quality at particularly good value. We believe in enjoyable our valued clientele with some other version of deposit promotions and bonuses.
Associates
Come to be our mate and gain excessive commission fee heights on a monthly basis by driving a vehicle people
to W88.
W88 aims to provide a station of entertainment to consumer within a beneficial
way. We certainly have ready important safeguards to promote and ensure dependable betting.
Protection
A Solid and Protected Betting Product. The confidentiality within your into is significant to us and we abide by exact confidentiality and privacy policy.
Physical activities Wagering And Survive Playing
Our company offers all the major sporting for instance English Most recognized League, Spanish Los angeles Liga, Italian Serie A, UEFA Champions League,
French Ligue 1, German Bundesliga 1, NCAA, NFL and NBA Gals Hockey,
Tennis games, Blueprint 1 and many other. We provide close to
4,000 Live life Playing football meets monthly for a wagering
happiness.
On the net Gambling establishment
Enjoy gambling establishment game on-line. Choose from Roulette, Blackjack, Video footage Poker, Progressives, others and Slots and get the an opportunity to succeed even more Gambling Jackpots on W88.
Exist Gambling
Now we have considerable number of offers.
For instance , Stay Dealer Casino with Survive Lobby access, gorgeous
Oriental sellers, Survive Baccarat, Are living Sic Bo, Live
life Dragon Live and Tiger Roulette, On the web Gambling establishment Slot machine games straightforward to experiment with Keno computer games.
Advertisements Put in Welcome and Bonus Extra feature for many new participants.
Reload Cash and Bonus Discounts for recent consumers also
Help Middle
Visit our FAQ website for sports activities
betting and gambling assist. It has help out
on account opening, withdrawal, deposit and technical
guide.
Check Systems
We present terrific option for users to pay in and pull away as you acquire withNETELLER and Moneybookers,
Worldwide Bank Switch, European Union and numerous others.
We certainly have all this, outstanding computer games start with W88.
Give Us A Call
We are available 24/7 via Live Chat, Telephone and E-mail, if you need any help or have any questions about Live betting or our casino games.
I was recommended this blog through my cousin. I’m not positive whether or not this
post is written by means of him as no one else recognise
such distinctive about my trouble. You are amazing! Thank you!
What a information of un-ambiguity and preserveness
of precious familiarity about unpredicted emotions.
Perfectly indited content, Really enjoyed reading.
I believe this is one of the so much significant info for me.
And i’m glad reading your article. But want to observation on some common issues, The website taste is
wonderful, the articles is truly nice : D. Excellent activity, cheers
Great blog you’ve got here.. It’s difficult to find high quality writing like
yours these days. I seriously appreciate people like
you! Take care!!
Pretty! This was a really wonderful post. Many thanks for supplying this info.
It’s in reality a great and useful piece of information.
I’m glad that you just shared this helpful information with us.
Please stay us informed like this. Thanks for sharing.
I see something genuinely special in this website.
Hello, i think that i saw you visited my web site thus i came to “return the
favor”.I am attempting to find things to enhance my web site!I suppose its ok
to use a few of your ideas!!
Unquestionably believe that that you stated.
Your favourite justification seemed to be on the net the simplest thing to take note of.
I say to you, I definitely get irked at the same time as folks consider worries that
they plainly do not know about. You controlled to hit the nail upon the highest and also
defined out the entire thing with no need side effect , other
folks could take a signal. Will likely be back to get more.
Thanks
hello there and thank you for your info ? I?ve certainly
picked up anything new from right here. I did however expertise some technical issues using this website, since I experienced to
reload the web site lots of times previous to I could
get it to load correctly. I had been wondering if your hosting is OK?
Not that I am complaining, but slow loading instances times will very frequently affect your placement
in google and can damage your high quality score if ads and marketing with Adwords.
Well I am adding this RSS to my e-mail and can look out for much more of your respective exciting
content. Ensure that you update this again very soon..
Is it me, or anyone else also think that Courtney
laughes so damn relentless around shayne?
You have brought up a very fantastic points,
regards for the post.
It’s enormous that you are getting ideas from this article as well as from our dialogue made at
this place.
I’ve been exploring for a little bit for any
high quality articles or weblog posts on this sort
of space . Exploring in Yahoo I at last stumbled upon this
website. Studying this info So i am glad to express that I have an incredibly just right uncanny feeling I found out just what I needed.
I most indubitably will make certain to don’t forget
this site and provides it a look regularly.
Hello there! This is my first visit to your blog!
We are a collection of volunteers and starting a new project in a
community in the same niche. Your blog provided us valuable information to work on.
You have done a extraordinary job!
An impressive share! I have just forwarded this
onto a coworker who was conducting a little research on this.
And he actually bought me dinner due to the fact that I discovered it for
him… lol. So allow me to reword this…. Thanks for the meal!!
But yeah, thanks for spending some time to discuss this issue here on your
web site.
I need to to thank you for this excellent read!!
I absolutely enjoyed every little bit of it. I have you saved as a favorite to check out new
things you post…
Magnificent web site. A lot of useful information here.
I’m sending it to some buddies ans also sharing in delicious.
And naturally, thanks for your effort!
We absolutely love your blog and find many of your post’s to be
exactly what I’m looking for. can you offer guest writers to write content to suit your needs?
I wouldn’t mind composing a post or elaborating on a lot of the subjects
you write with regards to here. Again, awesome web log!
Nice post. I was checking constantly this blog and I am impressed!
Extremely useful information specially the last part 🙂
I care for such information much. I was seeking this certain information for a very
long time. Thank you and good luck.