If you are trying to save money on your tax bill this year, you should look into tax-free savings accounts. Although these accounts don't allow to completely forego paying your taxes, you can at least defer them until a later date. In the meantime, you are free to use the money as you see fit.
Your Money Can Accrue Interest Tax-Free
The best reason to use a tax-free savings account such as an IRA or 401k is that the money will accrue interest that is not subject to tax until you make a withdrawal. This gives you more money to invest as you see fit until you retire without being burdened with giving some of it to the government. Your financial advisor will be able to help you decide which account will work best for you.
Lower Your Tax Bill For The Previous Year
The nice thing about most savings accounts is that you don't have to actually put the money in them in the year for which you are filing your taxes. For example, you can put money into your IRA up until the date that you file in 2013. However, your contribution will still lower your taxable income for the 2012 tax year. For most people, their tax returns are due in April or October if they file for an extension. This allows you to take advantage of a tax break even if you don't have the money in your account when the current year ends.
Invest In The Things That Interest You
Although most savings accounts limit you to investing in stocks and bonds, some savings accounts will allow you to invest in whatever you like. Using a self-directed account will give you the opportunity to invest in real estate, gold, and anything else that you think will make you money. Additionally, you can avoid real estate taxes if you decide to flip your properties and put the profits back into your account. Your financial advisor will be able to tell you how to make that happen.
Start Your Own Business With Your Tax-Free Savings Account
If you have ever wanted to start a business or help a friend or family member start a business, you can use the funds in your account to start up your business. However, you may have to repay whatever funds you take out of your account. If you are self-employed, you gain two advantages from this type of move. First, you can withdraw the funds without having to pay a penalty. Secondly, you can take the money out your account without having to get approval for the loan. That typically does not happen for self-employed people when they go to the bank.
A tax-free savings account gives you a variety of different benefits. You can lower your tax bill, use the money to invest and you can invest the money without paying capital gains taxes until you actually withdraw the money. There is no reason why you shouldn't have at least of these accounts.
Your Money Can Accrue Interest Tax-Free
The best reason to use a tax-free savings account such as an IRA or 401k is that the money will accrue interest that is not subject to tax until you make a withdrawal. This gives you more money to invest as you see fit until you retire without being burdened with giving some of it to the government. Your financial advisor will be able to help you decide which account will work best for you.
Lower Your Tax Bill For The Previous Year
The nice thing about most savings accounts is that you don't have to actually put the money in them in the year for which you are filing your taxes. For example, you can put money into your IRA up until the date that you file in 2013. However, your contribution will still lower your taxable income for the 2012 tax year. For most people, their tax returns are due in April or October if they file for an extension. This allows you to take advantage of a tax break even if you don't have the money in your account when the current year ends.
Invest In The Things That Interest You
Although most savings accounts limit you to investing in stocks and bonds, some savings accounts will allow you to invest in whatever you like. Using a self-directed account will give you the opportunity to invest in real estate, gold, and anything else that you think will make you money. Additionally, you can avoid real estate taxes if you decide to flip your properties and put the profits back into your account. Your financial advisor will be able to tell you how to make that happen.
Start Your Own Business With Your Tax-Free Savings Account
If you have ever wanted to start a business or help a friend or family member start a business, you can use the funds in your account to start up your business. However, you may have to repay whatever funds you take out of your account. If you are self-employed, you gain two advantages from this type of move. First, you can withdraw the funds without having to pay a penalty. Secondly, you can take the money out your account without having to get approval for the loan. That typically does not happen for self-employed people when they go to the bank.
A tax-free savings account gives you a variety of different benefits. You can lower your tax bill, use the money to invest and you can invest the money without paying capital gains taxes until you actually withdraw the money. There is no reason why you shouldn't have at least of these accounts.
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