Posted on May 20, 2021
These strategies can reduce the taxes you will pay on retirement accounts
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CNBC story on tax management of retirement accounts in the U.S.
These strategies can reduce the taxes you will pay on retirement accounts
Posted from cnbc.com
Retirement
Investing
Personal Finance
Posted >1 y ago
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Given an investor who invests $10,000 each year and his tax rate is 20%.
He will not pay taxes on the $10,000 which is $2000. If he did not invest $10,000 he would have paid $2,000 in taxes. The IRS is essentially giving you back $2000. What is the cost of investing $10,000? $8,000 from you and $2,000 in tax reduction from the IRS. Your out of pocket expense is $8,000 to invest $10,000.
He will not pay taxes on the $10,000 which is $2000. If he did not invest $10,000 he would have paid $2,000 in taxes. The IRS is essentially giving you back $2000. What is the cost of investing $10,000? $8,000 from you and $2,000 in tax reduction from the IRS. Your out of pocket expense is $8,000 to invest $10,000.
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