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Taxes
Learning Center • financial tips • cash reserves • insurance • savings accounts • growth investments • taxes • retirement • estate planning  |
First, the money you contribute to your qualified retirement plan each year is tax deductible, so every $100 you contribute reduces your taxable income by $100. Paying fewer taxes means there is more money left in your paycheck for your regular day-to-day expenses.
Contributions to annuities and Roth IRAs are not tax deductible, but annuities grow year after year tax deferred and a Roth IRA grows tax free, so they are good investments for any additional cash you have left after you have done your qualified retirement plan.
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Tax deductions can be a big benefit to you. First, you get a personal deduction of $3,400. If you are married and your and your spouse are filing jointly, you each get a $3,400 deduction, so that totals $6,800. If you have dependent children, they each get a $3,400 deduction, so three kids give you $10,200 in deductions. Then your total deductions for the family are $17,000.
If you support your parents or other family members, each of them also gives you a $3,400 deduction.
Peterson Money Books
Book: MONEY Changes Everything, by Erlend Peterson, CFP
Seven Simple Steps That Will Make Money Work For You!
money changes everything | rich by choice | challenge of wealth
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