SAFELY FINANCE YOUR CHILD?S UNIVERSITY STUDIES USING AN EDUCATION IRA!
This investment retirement account (IRA) is useful to you as an investor to understand because it may be a good way for you to save for your kid's education AND save on taxes. These plans are now called Coverdell Education Savings Accounts in honor of the late U.S. Sen. Paul Coverdell. Individuals can make annual contributions of up to $2,000 per child into an account that's exclusively for helping to pay higher education costs.
The money contributed to a Coverdell account doesn't count against the $3,000 ($3,500 if 50 and older) annual total individuals may contribute to their combined personal individual IRAs. The earnings and withdrawals from a Coverdell account are tax-free, but you can't deduct the contributions from your income tax because the account is for the benefit of the child, not the contributor. This is great for parents who are good savers and investors who want to make an annual tax-saving contribution that they can invest in the stock market toward the education of a studious and responsible child. In addition, if your child received a Coverdell ESA distribution, you now can also claim Hope Scholarship or Lifetime Learning credits. Just make sure you don't use Coverdell money to pay for the same expenses you use to claim an education credit.
The beneficiary (your child) of the education IRA must withdraw the funds by age 30 if they don't go to college and pay taxes and penalties on it. However, the account can be transferred to a sibling or the beneficiary's child if they don't pursue a higher academic degree or use it all. Once you have the account open you can use the stock market to help finance your child's education selling the stock at a high price after you have bought it at a low price using techniques such as I teach..
ABOUT THE AUTHOR: Dr. Scott Brown, Ph.D., the Wallet Doctor, is a successful investor. Dr. Brown holds a Ph.D. in finance. The Wallet Doctor is sought after for investment advice and coaching. For more information visit Dr. Brown?s site at www.BonanzaBase.com or sign up for his investment tips at www.WalletDoctor.comSEP IRA - For Last Minute Tax Deductions
Virginia - February 24, 2003 - The SEP IRA is one of the few remaining methods for small business owners to cut their taxes for last year.
Employer contributions made to a Simplified Employee Pension-Individual Retirement Account, known as a SEP plan, before a company's tax filing deadline are deductible for 2002.
This holds true even if the SEP plan is set up and the contributions are made in 2003."A SEP-IRA allows small business owners and sole proprietors in a very simple manner to cut their tax liability by making retirement contributions for their eligible employees," says Daniel Lamaute, retirement plan specialist at InvestSafe.com and CEO of Lamaute Capital, Inc.The SEP-IRA has several main advantages for employers, says Lamaute.
"Employers get a tax deduction while the SEP-IRA contribution is not taxed as income to the employees.
The earnings within the SEP IRA are taxed deferred until the participant pulls money out, usually at retirement...
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Brand New Employer Sponsored Plan Is A Hybrid Of A Traditional 401(K) And A Roth Ira-January 1st, 2006 Is Start Date For New Roth 401(K) Retirement Savings Plan
(ContentDesk) December 7, 2005 -- Income tax rates have been cut, the marriage penalty done away with, and the "death tax" is also on a path to no more.
All of this is a result of the Bush administration's Economic Growth and Tax Relief Reconciliation Act which was passed by a Republican congress in 2001.
Another provision of that act goes into effect on January 1st, 2006, a hybrid of a traditional 401(k) and a traditional Roth IRA called the Roth 401(k).
Yet another employer sponsored savings plan, the new Roth 401(k) works in almost the same way as a traditional 401(k) plan.
Workers invest a portion of their income into a fund along with contributions from their employer (if any).
The difference is that the traditional 401(k) is funded with "pre-tax" dollars and the Roth 401(k) plan uses "after-tax" dollars.
However, with the Roth 401(k), withdrawal of your money at retirement will be tax free like a Roth IRA.
The traditional...
Ira > Brand New Employer Sponsored Plan Is A Hybrid Of A Traditional 401(K) And A Roth Ira-January 1st, 2006 Is Start Date For New Roth 401(K) Retirement Savings Plan
Tax Treatment for Coverdale IRAs
A number of publications, including my own, have mistakenly reported over the past year that Coverdale IRAs, formerly known as Education IRAs, are tax deductible. Coverdale IRAs are not tax-deductible.Originally the concept of education IRAs was meant to provide a tax-deductible benefit that would defer taxes on contributions until the time of withdrawal, but the accounts were limited in size to only $500 per year. Due to the small allowable account size, these Education IRAs were not very popular with savers of financial institutions. Then in 2001 the amount of the allowable contribution was increased to $2,000 for individuals with an income up to $95,000 or couples filing jointly with an income up to $190,000. But the contribution is not deductible from taxable income for federal income tax purposes in the same manner as a traditional IRA account.One possible "work around" to achieve the immediate tax deferral benefit of deductibility is to make a regular tax deductible IRA contribution...
Tax Treatment for Coverdale IRAs
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Roth IRA
The Roth IRA (Individual Retirement Account), named after Senator William V. Roth, Jr., came into effect on January 1, 1998. A result of the Taxpayer Relief Act of 1997, the Roth IRA provides a benefit which is otherwise not available in any other form of retirement savings. If you meet the criteria and subscribe to the Roth IRA, all your savings will be tax-free when you or your beneficiary draws on them.
Another advantage is that you can also avoid the early distribution penalties, which you would otherwise have to pay with any other type of withdrawals.
The picture, however, is not all that rosy. This is because you don't get a deduction when you contribute to the Roth IRS.
But since you already paid the taxes for the money contributed to this account, you don't have to pay any at the time of withdrawal.
You need to meet certain eligibility criteria in order to contribute to the Roth IRA. One basic condition is that you should have earned...
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Nexus Financial Management Explains How High Income Taxpayers Can Take Advantage of a Roth IRA
Jacksonville, FL (ContentDesk via ContentDesk Direct) July 17, 2006 -- The Tax Increase Prevention and Reconciliation Act (TIPRA) recently signed by President Bush eliminates the $100,000 Modified Adjusted Gross Income (MAGI) ceiling and the married taxpayer joint filing requirement for converting a traditional IRA into a Roth IRA, but not until the year 2010. All other rules continue to apply, which means that the amount converted to a Roth IRA will still be taxed as income at the individuals highest tax rate. Under current law, single taxpayers with MAGI of more than $110,000 cannot contribute to a Roth IRA; or married taxpayers with joint income in excess of $160,000. However, by eliminating the income ceiling for conversions, the income limits on contributing to a Roth IRA have essentially been removed as well. In 2006 and 2007, individuals can contribute up to $4,000 per year to a nondeductible traditional IRA ($5,000 if age 50 or...
Nexus Financial Management Explains How High Income Taxpayers Can Take Advantage of a Roth IRA
Ira > Nexus Financial Management Explains How High Income Taxpayers Can Take Advantage of a Roth IRA
Adobe Photoshop levels-Turn junk into gold by clicking a button
There is no doubt in my mind; Adobe Photoshop is the greatest Photo editing program in the world. Whether you are a novice or an expert Photoshop is the program for you. Photoshop is used by my children and by the movie making industry. So what exactly can I do with Photoshop? The better question is what can't you do with Photoshop?Today I would like to talk about the simple little function in Photoshop called ?Levels', the first step to improving the appearance of a photograph. There are 4 basic...
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Everything About 0% Intro Rate Credit Cards
Tired of reading review after review about 0% APR intro rate credit cards? Having no luck when it comes to finding an all-in-one-review about 0% APR intro rate credit cards? Confused with what you've read so far about 0% APR intro rate credit cards because everything seems to be contradictory? Well, look no more because this article is indeed what you're looking for.
In here, you'll learn everything you want to know about 0% APR intro rate credit cards. In this article, you may...
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POSH Handbags
Posh? was founded by owner & designer Tori Alvarado in the Spring of 2002. Tori was a creative-child and has always had a flair for Fashion. Even as a little girl she always seemed to have a knack for handbags & the idea of creating something unique & stylish that was very much her own. Growing up Tori was heavily influenced by both her Mother & her Grandmother. Designing was a family trait and always highly encouraged.After working six years in Corporate America in the Computer Industry Tori...
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As a Home Mortgage Lender, Specializing in Home Improvement Loans, Lyon Financial Service Offers Home Loan Programs Your Local Bank Cannot Offer You
The difference between a home improvement loan and a home equity loan is of great importance to you as the borrower. Customers are not aware of the fact that a home improvement loan allows "add back" of the home improvement contract and will qualify them for better rates. A fixed home equity loan or equity line of credit is based only on the existing equity in the home with no after value feature for home improvements. Lyon Financial is an expert in these types of Home Improvement loans, as well...
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Ira > As a Home Mortgage Lender, Specializing in Home Improvement Loans, Lyon Financial Service Offers Home Loan Programs Your Local Bank Cannot Offer You
Marriage counseling: perfect way to save your marriage
Some years ago, everything looked so wonderful ? both of you felt in love and decided to get married, because none of you could imagine its life without being together. Now something has changed ? endless quarrels, harassments, and tears, you feel misunderstood and deeply hurt ? it looks to be a part of your daily routine. Sometimes you think that there is only one solution to stop this mess ? to divorce. However, you are not right; marriage counseling...
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