Have you been considering the impact taxes will have on your retirement savings? Have you been strategic in managing the effect taxes may have on your financial future? If you answered no to either of these questions, you may want to take a look at the following tax planning ideas.
- Consider a Roth IRA
You make contributions to a Roth IRA with after-tax dollars. So, when you withdraw from a Roth IRA, you don’t have to pay taxes on those withdrawals. There are various rules about when you can withdraw from a Roth IRA, and there are some limitations to contributions, but a Roth IRA might be a good option if you expect that you are currently in a lower tax bracket than you will be when you retire.[1]
- Tax-Advantaged Investments
Certain investment products can have tax benefits depending on how you use them. Some types of real estate may be tax-advantaged. Annuities can come with tax advantages. In addition, municipal bonds may also come with tax advantages. So, make sure you ask your advisor about some tax-efficient strategies before finalizing your investments.[1][2][3]
- Charitable Giving
Did you know that giving money to charity can help you to reduce your tax burden? You will have to itemize your income tax, but if you do, it’s possible to reduce your tax burden if you strategize your charitable gifts with your taxes.[3]
Conclusion: If you’ve ever wondered what you can do to reduce your tax burden, we’re just scratching the surface. There may be ways that insurance can provide you with tax-efficient funds to help cover your costs and reduce your taxable income. However, it takes a well-planned process and a comprehensive understanding of your financial options to make sure you make the most of the tools available to you.
If you think you’ve been paying too much in taxes or are worried you might in the future, now is a great time to reach out to a financial professional. They can help you uncover a complete picture of your financial situation, illuminate key strategies that may work best for you, and offer their vigilance and guidance throughout your financial journey. So, Click HERE to reach out to us today at SouthPark Capital for a complimentary review of your finances to get started.
[2] https://smartasset.com/taxes/tax-benefits-of-real-estate-investing
[3] https://www.annuity.org/annuities/taxation/
