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But there’s a newer version of the IRA that’s only a few years old.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IRA contributions, as well as the growth of those contributions, will be subject to income tax when the money is withdrawn from the account.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Whatever you put in not only grows tax-free, but can also be withdrawn tax-free.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!
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According to “The Hollywood Reporter,” the
Countrywide Association of Theater Entrepreneurs is having strides
towards a new advertising and marketing rule. It would shorten the trailers revealed just before flicks to two minutes each and every as an alternative of the recent regular of two
minutes and thirty seconds. Theater entrepreneurs
really feel, dependent on responses from their patrons, that trailers are extremely prolonged
and frequently spoil the plots or greatest scenes from a film.
Moreover, considering that it can be widespread exercise to clearly show as
lots of as eight trailers ahead of a movie commences, viewers
are in the theater waiting around for their exhibits to start for all-around
20 minutes. Theater entrepreneurs feel that shortening trailer lengths
will direct to enhanced purchaser pleasure and less grievances
about spoilers.
But are these complaints reputable? In modern culture of streaming movie
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the clock. Lots of moviegoers no longer rely on the significant-display screen trailers they
see at the theater to choose which films they
want to check out. Continue to, online trailers vary in duration and
excellent, and audiences need to have to make the effort
and hard work to identify and view them-compared with the trailers in the theater,
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a motion picture these as “The Sixth Sense” giving absent
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about whether to pony up the ticket price or wait around a few months for the film to get
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1 factor is apparent: no matter of whether or not much less is far more, audiences nevertheless love looking at trailers at the movies for a number of motives.
The Pleasure Aspect
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movies appear to be as although they will be wonderful.
It can be enjoyable to see what’s on the Hollywood horizon, and the major screen and dynamic seem
assistance get-and maintain-viewers’ curiosity.
The Nostalgia Component
Individuals who grew up likely to the movies prior to the Online was commonplace remember the trailers as being one particular of the most fun components of the moviegoing working experience.
Mainly because persons couldn’t check out trailers for forthcoming flicks at will, they relied on the
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The Top quality Issue
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at the in general quality of a movie-its audio, its cinematography,
and its total production values. The finest trailers will not
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dialogue, specially majestic landscapes, and intriguing specific results to highlight.
These rapid summaries can often enable audiences know promptly whether a motion picture has been cautiously
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The Information Element
You can find no denying that people today crave information, even when that information and facts could possibly not be very good for them.
Any film with a surprise twist promptly results in being the
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The need for all that information-the facts of the shocking ending, the wittiest jokes, the cleverest sight gags-is significant,
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