28 March 2010

Tax Minimization Strategies

It’s tax time again. Let’s see what we can do about minimizing your tax burden for 2009

While there are a limited number of strategies for individuals, it still makes sense to save every penny you can on your tax bill.

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18 February 2009

Investing Step #8: Health Savings Accounts

The Health Savings Account is becoming a more popular option recently. It is a great opportunity to save money on your medical insurance. Despite that it is still an under-used option.

Health Savings accounts allow you to contribute money to an account who’s funds are designated specifically for health uses. While many people might not immediately see the value in this, it represents an option in which you can almost immediately recoup a large percentage in savings. If you are in a 33% tax bracket, then every expense you make using this account is essentially at a 50% discount.

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16 February 2009

Investing Step #7: Home Ownership

While there are not explicitly tax-deferred savings plans for housing, the Roth IRA can work very much like one. If you are looking to buy your first home in the future, more than 5 years from now, or if you have a Roth IRA opened already, such an account may be a very reasonable option for your investing dollar. While you cannot take your contribution out pre-tax, any income you make over those 5 years can be used tax-free to buy a house, up to $10,000 per person. This can be a considerable savings.

While retirement and college may seem like distant issues, buying a home is much closer on our investment timeline for most of us. If you already own a home, or have in the past, you can pretty much skip this section as a Roth IRA will not do you much good. Its exemption for buying a home only applies to first time buyers, but it can be very powerful for those looking to maximize their earnings.

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14 February 2009

Investing Step #6: College Saving

The next event or investing horizon is College. Obviously in some cases a first house may be sooner than college, or even in more rare cases retirement may be further off. In general however money that is invested in College Savings Plans will be tied up the second longest, next to your Retirement Accounts.

Due to the wide variety in the plans there can be many key details, but ultimately the primary consideration in these plans is the likelihood that this money will be used for college. If it is not, then the money will be taxed when withdrawn, as well as a 10% penalty, similar to early withdrawal in a retirement account. At the same time, college can be a major expense in a family’s life and the tax benefits of these accounts can be huge.

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12 February 2009

Investing Step #5: Retirement Accounts

Retirement accounts are probably the type of tax-deferred vehicle with which people are the most familiar. The number of people invested in the stock market has skyrocketed in the past two decades, much of which is owed to tax-deferred retirement accounts.

All of these plans have many things in common but also many nuances, be sure to do research and consult with a professional. However there are also many truisms that can help you make good decisions.

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10 January 2009

The Best Investment In The World

By this point in people’s lives they are well aware of the merits of 401(k)s and other retirement accounts. Most people have wisely made them a part of their investment strategy, however many misconceptions still persist about them. While most people do contribute, many of them spend very little time allocating their funds and instead make other hasty decisions based on misconceptions. So here are some important things to know about the best investment in the world: tax-deferred retirement accounts.

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