Tax Advice

    Posted on May 28th, 2012 in The Wealthy Spirit by chellie

    Updated insider information by Chellie Campbell, author of “The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction”

    148-May 28

    “There’s only one thing worse than paying income tax; and that’s not paying it!”—Anonymous

     

    I am not a CPA, nor an enrolled agent. I don’t prepare tax returns, so I am not going to give you specific tax advice. This is just the general news I think everyone needs to know:

    1. Get professional advice. Pay the money. I never had a tax preparer that didn’t save me more money on my taxes than his or her fee cost me. In The Millionaire Next Door, authors Stanley and Danko outline many areas where the typical millionaire saves money, buying second-hand cars, resoling their shoes, etc. “But they are not nearly as price-sensitive when it comes to purchasing investment advice and services, accounting services, tax advice, legal services, medical and dental care for themselves and family members, educational products and homes.” They state that the affluent account for only about 1 percent of the U.S. households, but they pay 25 percent of the tax on personal income. Taxes are the largest expense they have, and they want the best advice they can get on how to reduce that burden. The tax preparer’s fee is even tax-deductible!

     

    (Continued on page 148 of The Wealthy Spirit)

    Today’s Affirmation: “I happily pay my fair share to help my government run efficiently and effectively.”

     

    Marc Weiss gave a great talk at a WRS (www.worthwhilereferralsources.com) meeting I attended, and I invited him to share some of his information with you here on my blog. Although you may love your work like I do and not necessarily want to retire, you will want to have a retirement account regardless. It feels good when you have savings and investments! You attract more money when you feel rich and prosperous and secure.

    Breaking Down Your Retirement

    By Marc H. Weiss

    Archer Weiss Insurance & Financial Services, Inc.

    http://archerweiss.com/retire-safe-and-tax-free.cfm

    Telephone: (818) 346-3700

    marc@aicsocal.com

    Saving for retirement is often a daunting task.

    Sometimes though, breaking big, complex issues – such as saving for retirement – down into more manageable pieces can make all the difference in the world. Here are three basic questions to ask yourself when it comes to your retirement savings. While these are far from the only questions you’ll need to focus on in order to achieve a successful retirement, if you know these answers you’ll have a definite head start.

    Question #1 – Am I contributing enough to my retirement accounts?

    Retirement accounts, as the name implies, are great places to save money for retirement. The tax-favored nature of these accounts often helps individuals to accumulate far more value than would have been achieved in a taxable account. If you are working and have earned income, you’re most likely able to contribute to some type of retirement account – something you should seriously consider. Making even small contributions consistently over time can add up to big savings down the road.

    Am I contributing to the right type of retirement account?

    Depending on your age, your income and your employer, you may have access to a variety of retirement account options.  For instance, let’s say you are 50 years old and make $100,000 per year and your employer offers a 401(k) option. In this case, you’d have a number of choices on where to save for retirement on a tax-favored basis.

    You could defer a portion of your salary into your 401(k), you could contribute to an IRA or you could contribute to a Roth IRA – in fact, you could even have some combination of all three. What’s the best place? That depends on a number of factors (beyond just your age and income), and is a decision that is best reviewed with a CPA or financial advisor who has specialized knowledge in this area and has a keen understanding of your current financial situation and long-term goals.

    Do I have a plan for taking money out of my retirement accounts?

    In determining how long your money will last, it’s not just the size of your accounts that matter; it’s the way you distribute the funds from those accounts. Distributions from some accounts, such as a Roth IRA, may be tax-free, while distributions from other types of accounts, such as 401(k)s or IRAs, may trigger significant amounts of income tax.  Determining just how much to take from each account and when to take it can play a major role in helping you achieve your financial objectives.

    Marc H. Weiss

    Archer Weiss Insurance & Financial Services, Inc.

    http://archerweiss.com/retire-safe-and-tax-free.cfm

    Telephone: (818) 346-3700

    marc@aicsocal.com

    Post a comment

    You must be logged in to post a comment.