Posts Tagged ‘lower your income taxes’

Reduce Your Income Taxes

Wednesday, May 15, 2013 posted by Martin
Engraved Motivational Stones

Engraved Motivational Stones

It is getting tougher to reduce the federal income tax bite as deductions become worth less when your income rises.  Here are four widely accepted ideas,  you should keep  in mind as you develop your plans.  They are as solid as engraved rocks.

  • Consider laddered tax deferred income sources. The term of these investments should  depend on your age and financial situation.  Speak with a professional about what is right for you.  Be cautious.  Watch out for investments with high front loaded fees.  Look for no loads or small fees.
  • If your employer offers a 401K  with a matching plan, it is foolish not to take advantage of it.  Invest as much as you can afford.
  • Consider a Roth IRA.  All of the profits on this investment can be tax free under the Roth rules.  However, you invest in a Roth using after tax dollars.
  • Open a flexible spending account if it is offered by your employer.  Suppose you put $100 per month in an FSA.  That is $1,200 per year that is not taxed.  The $1,200 can be used for any valid medical purpose including co-pays and non-covered medical expenses such as eyeglasses.
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