I need to contribute $6500 to an IRA. I am trying to reduce my tax bill. Can you tell me which IRA's to consider?
I am 59 years old w/ a small business (S-Corp; I file IRS form #1120S) and I own rental property also. In 2014 I inherited taxable income from my father's estate. I am trying to reduce my tax bill.
I currently have two Fidelity IRA's: Magellan & Growth & Income.
Hello Suzee. I was asking the same question years ago. I run a small business and so I’m always looking for a way to reduce taxes. I went with the traditional IRA (T/IRA) because it is a pre-tax vehicle which reduces my taxable gross. I, too, have it with Fidelity, and when I contribute the same max as you do, I pay less in taxes. That would not be the case with a Roth IRA. So, if I made 100K in 2014 and I contributed $6500 to my T/IRA, my taxable gross is reduced to $93,500. Add other expenses (to include HSA contributions!) and the total works to drive down the tax bite. One last item: I contribute the amount as early in time as possible so that it has more time under an interest rate to increase the return. | 02.10.15 @ 19:37
Hi Suzee. To answer your question, let's better our understanding of IRA's. An IRA is not a product offered by an investment company, it is simply an account, much like a checking or savings account. You can open one at a bank, or at a brokerage like Fidelity. Its what investments you choose to use in your IRA that is important. It appears you currently have two different mutual funds in your retirement account (s). In order to determine if these are a good fit for you, you would need to talk with an advisor about your risk tolerance, liquidity needs, and future financial goals. In addition to mutual funds, ETFs are a great way to invest at a lower cost. | 02.19.15 @ 20:02
It depends, do you have employees for your business, has the business been in place less then 3 years. If so, you can put up to $52,000 in a SEP IRA.
If you like to put away money in an individual account, then it would be a regular IRA. | 03.04.15 @ 00:20
I do have 6 employees and have been in business 21 years. | 03.06.15 @ 13:32