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By Jerrod Foresman
HOW MANY DAYS WILL YOU WORK THIS YEAR JUST TO PAY THE GOVERNMENT?
Before you contemplate the answer to this question, ask yourself if you've taken the proper measures to reduce your tax bill.
There are strategies to help you reduce the impact taxes can have on your investment returns. From Municipal Bonds providing tax-free income*, to Traditional and Roth IRA's, numerous vehicles are designed to help you pursue your financial objectives while also striving to lessen your tax burden.
The question is, which is right for your investment tax strategy or retirement plan?
Tax-free bonds may be one way to help with your investment tax strategy. You may be able to reduce the impact taxes have on your investment earnings by investing in tax-free income. As we all know too well, taxes can have a meaningful impact on your bottom-line returns.
If you focused on accumulating wealth for retirement, you may want to consider yearly contributions to your Traditional or Roth IRA. Benefits range from tax-deductible contributions, tax-deferred earnings, and tax-free distributions.
Contribute $5,000 for 2008
The maximum contribution for an IRA is currently $5,000. Married couples can now invest up to $10,000 using a spousal IRA. Also, if your over age 50, you can add another $1,000 for 2008 as a catch-up provision to help you make up for lost time.
Which IRA is right for you?
Nearly everyone qualifies for a Traditional or Roth IRA. Which one works for you depends on your earned income, your participation in a company retirement plan, and your tax filing status. We would be happy to help you select an IRA that fits your specific needs. With more than 10,000 investment choices, we can help you create a well diversified investment portfolio that is aligned with your retirement goals and tolerance for risk.
It takes the average person 101 days to pay the government. And, with April 15th just around the corner, now may be an opportune time to meet with a financial advisor to discuss your particular situation and some investments that may help you keep more of your hard-earned money.
* For investors subject to the federal or state alternative minimum tax, a small portion of the dividend income may be subject to such a tax. Distributions of capital gains and of ordinary income from accrued market discounts, if any, are generally taxable.
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