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Work From Home? Here’s How to Take The Tax Deduction

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If you’re self-employed. You may be eligible for a variety of tax deductions designed to reduce your tax burden. Overlooking these deductions means potentially paying more in taxes than necessary. Something that isn’t ideal for anyone. If you want to make sure you get every deduction you’re eligible to snag. Here are some work from home tax deductions that you should take advantage of if you qualify for them.

Home Office

If you have either a separate home office or a designated spot in your home where you work. You may be eligible for a home office deduction. The IRS does require that the space be used “exclusively and regularly” for work. Though, for many self-employed professionals who mainly handle computer-based tasks. This requirement is often fairly simple to meet.

With this deduction, you have two potential approaches. If you’re looking for the easiest option, go simplified. With that, self-employed individuals have the ability to deduct $5 per square foot of office space, up to a total of 300 square feet.

If you aren’t afraid of handling some calculations. You can use the regular method. With that, you can calculate the percentage of your home that you are using for work only. Then, apply that percentage to eligible housing related costs. Which allows you to determine what portion of the allowable expenses are deductible.

In many cases, it’s wise to run both options to determine which approach results in the largest deduction. Just make sure that you handle the calculations carefully to ensure accuracy when you go through the more complex method.

Health Insurance

If you’re self-employed, bought your own medical coverage, and aren’t eligible for coverage through a spouse’s employer, you may be able to deduct the cost of your premiums. Technically, this isn’t a deduction. Instead, it’s an income reduction, so you don’t necessarily have to itemize to claim this benefit.

Vehicle Expenses

If you drive your car as part of your self-employment business, you may be eligible for vehicle expense tax deductions. Usually, you’ll get a specific amount per mile driven, allowing you to recoup some of the financial loss related to greater wear and tear on your car.

Claiming this deduction does require an accurate log of your miles traveled for business purposes. However, it can be substantial, so it’s worth keeping those records to reduce your tax burden.

Plus, there are also potentially deductible vehicle costs. For example, gas, parking fees, tolls, repairs, and similar expenses related to business-connected travel may be claimable.

Self-Employment Tax

While it may seem odd, it is possible to snag a tax deduction for paying self-employment tax. Self-employment tax is the Social Security and Medicare tax that people who are self-employed have to pay and comes in at a rate of around 15.3 percent.

With traditional employment, the employer and employee split that tax burden. If you’re self-employed, you have to pay it all. But you also get to deduct half of the amount you pay when you file your taxes, helping you to reduce some of that burden.

Internet and Phone

If you use your home internet for work or have a separate phone for business purposes, you can deduct the portion of your bill that aligns with your business use. For example, if half of your internet time is work-related, half of your internet bill can be a deductible expense. If you have a separate phone line for business calls that is only used for that purpose, that is 100 percent deductible.

Trade Publications, Memberships, or Subscriptions

Self-employed individuals who pay for specialty publications, memberships, or subscriptions that directly align with their work can deduct the cost as a business expense. The most critical part of the equation is that the content is specialized. For example, a trade magazine counts, while a national newspaper does not, as the latter is too general to be profession-specific.

Educational Expenses

Educational expenses related to honing work skills in your current self-employment field can be deductible. The course or skill has to connect to your existing business, not something you hope to do later or anything you do for personal growth. For example, a self-employed web developer can deduct the cost of a course on responsive design but wouldn’t be able to take the deduction for a yoga class or music theory course.

Advertising

If you spend money to advertise your business, that cost is deductible. This can include any kind of paid-for ad, including Facebook or Google ads, television commercials, bench ads, or mailed flyers.

Business Insurance

In most cases, business insurance premiums are deductible. There are some nondeductible premiums, though, so it’s wise to review IRS guidance to determine which ones you can use to reduce your tax burden.

Office Equipment and Supplies

In many cases, office equipment or supplies that you purchase to use for your self-employed business can reduce your tax burden. The value of the items may determine what kind of deduction or benefit you receive, as high-cost items like computers may be treated differently than pens and paper.

Credit Card and Loan Interest

If you paid interest on a business purchase because you used a credit card or loan to cover the cost, you might be able to deduct the interest. The card or loan doesn’t necessarily have to be a business one. However, you usually need to use that card or loan solely for business purposes to claim the deduction cleanly.

Travel (Including Meals)

If you’re gone on business, some of your travel-related costs are deductible. Plane tickets, hotel stays, Uber rides, and similar expenses that you incur while away from home handling a work-related activity can potentially qualify. Similarly, certain meal-related costs may be deductible, including if you take a client out for dinner or have to pay for meals because you are on the road.

Retirement Contributions

If you have a self-employed retirement plan – like an SEP IRA, Solo 401(k), or SIMPLE IRA – you can potentially deduct the contributions. This can be a boon if you save up to the contribution limit, though it does make a difference even if you are setting aside less than that each year.

Qualified Business Income

A newer self-employed tax deduction, the qualified business income deduction allows self-employed individuals – as well as some small business owners – to deduct part of their business income when they file their taxes. Your total taxable income from all sources does have to be below a set threshold to qualify. But if it is, you may be able to deduct 20 percent of your taxable business income.

Do you know of any other work from home tax deductions? Share your thoughts in the comments below.

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Are Business Gifts Tax Deductible?

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How do you strengthen relationships with customers and/or business partners? A tried and true way is using gifts. However, gifts cost money, so the next question is, are business gifts tax deductible?

The straight answer is yes, but it’s much more nuanced than that.

There are limitations

Business gifts are tax deductible, up to a certain dollar amount. You can deduct no more than $25 of the cost of the gift you give to each person through the course of the year.

Incidental costs such as engraving, packaging, and shipping are not included in the $25 limit as long as it doesn’t add substantial value to the gift.

Gifts that cost $4 or less are not included in the $25 limit IF the company name is permanently placed on the item and the gift is widely distributed.

Entertainment

Any item that can be considered a gift or entertainment is usually considered entertainment and is deducted at 50% of the value of the gift. For purchases that fall under both categories, use the “gift deduction” on lower-cost items and the “entertainment deduction” on items larger than $50.

Gifts to others

If you and your spouse give gifts to the same person, you’re treated as one taxpayer. The same rule applies to partnerships.

Gifting to a customer’s family counts as a gift to that customer, unless the customer’s family member(s) is a client as well.

The $25 limit only applies to gifts given to individuals. Gifts given to other companies, generally, don’t apply and are fully tax deductible.

Gifts to employees are taxable compensation.

Other relevant information

Keep adequate documentation that includes the purpose of the gift, what was spent, the date of purchase, and the business relationship.

Gifts given to a 501(c)3 non-profit are tax-deductible. Up to 25% of taxable income for a corporation.

A large majority of the information I have listed above came from the IRS publication about “Gift taxes”.

Related reading:

Some Often Overlooked Tax Deductions for Business Owners

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Why Understanding Your Paycheck Stub Is Important

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Understanding your paycheck stub is essential. Your paycheck stub is included when you get paid. Whether you do direct deposit or get paper checks, the pay stub will show important information about your pay.

There are several key pieces to the paycheck stub – gross earnings, taxes, deductions, and net earnings. There are also other, seemingly, unimportant things on your paycheck. The information included on a paycheck stub include:

  • Hours works
  • Wages earned – gross and net
  • Overtime
  • Benefits – i.e. health insurance premium payment, retirement plan contributions
  • Taxes – federal, state, fica (social security 6.2, medicare 1.45, and .9 surtax if you earn over $200,000
  • Year to date info – hours, wages, taxes, benefits, etc.\
  • Personal information – name, address, social security number
  • Date of pay period
  • Pay rate
  • PTO, sick days, vacation days

Why is understanding your paycheck sub so important?

A pay stub is a way of keeping accurate records. It shows what employees worked, what they were paid, what taxes were taken out, retirement contributions, etc.

Because it’s your responsibility to report and address discrepancies. If you think you got paid less than you were supposed to or worked more than what’s reported, you need to bring that up. If your deductions (retirement plan contributions, taxes, health insurance premiums) appear to be less or more than you assumed, you need to bring that up.

Why are those things important?

  • What you earn is what allows you to afford to live. If you worked more or worked overtime, and it wasn’t reported correctly, your paycheck can suffer.
  • Taxes are incredibly important – if you expect to get money back on your tax return, but come to find out they weren’t withholding enough, you can end up owing instead. Your withholdings are very important to understand.
  • Health insurance premiums – if you’re not paying enough, your policy can cancel due to non-payment. What happens then? You go to the doctor and pay through the nose because you don’t have coverage?
  • Retirement plan contributions – If they “contribute” too much, you will have less on your check. If they “contribute” too little, your nest egg will suffer.

Paycheck stubs are incredibly important. They help you and your employer keep track of pertinent information, like taxes, health insurance premiums, retirement plan contributions, and your salary. Make sure you understand it and make sure you address any sort of discrepancy. That’s your responsibility.

Related reading:

Paycheck Stubs

Three Accounting Tools Every Small Business Needs

Does Health Insurance Affect Your Taxes

Is It Safe to Throw Away Bank Statements?

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Before we answer the question as to whether or not it’s safe to throw away bank statements, we need to cover how long you should keep certain statements. The following list is provided by TrueShred.

Statements to shred right away:

  • Sales receipts (unless you need them for tax purposes; in that case, scan them first)
  • ATM receipts
  • Packing slips and online purchase orders
  • Canceled and voided checks (that aren’t tax-related)
  • Utility, internet, and cell phone bills (once paid)
  • Credit card, insurance, and bank account solicitations that come in the mail
  • Expired warranty coverage
  • Correspondences from the DMV or IRS (once settled)
  • Travel-related materials (besides your passport)

List of documents to throw out after 3 years

  • Bank statements
  • Credit card statements (once paid)
  • Pay stubs (once checked against your W-2 for accuracy)
  • Medical bills (once paid and free of insurance disputes)



List of documents to throw out after 7 years

  • Tax returns
  • W-2s
  • Tax-related receipts and canceled checks
  • Records for any tax deductions you took
  • Other tax records

List of documents to throw out (variable intervals)

  • Auto titles (keep for as long as you own the car)
  • Home deeds (keep for as long as you own the property)
  • Disputed medical bills (keep until the issue is resolved)
  • Home improvement receipts (keep until you sell your house and pay any related capital gains taxes)

List of documents to keep forever

  • Birth certificates
  • Adoption papers
  • Social Security cards
  • Marriage certificates
  • Divorce decrees
  • Citizenship papers
  • Passports
  • Death certificates

You should keep these documents in a very safe place. I’d recommend a fireproof safe to keep these things protected.

How should you dispose of sensitive documents?

It is safe to throw away your bank statements, as long as you do so in a particular fashion. If you have a significant amount of paperwork, hire a shredding service. If you don’t have that type of volume, put it through a shredder. Tearing the papers up once or twice won’t do the trick.

Another safe disposal method, as recommended by Patch.com is to wrap up unused or spoiled food with the sensitive documents, and throw them in the refuse bin. Scavengers are more likely to “skip over” the refuse bin when they’re looking for sensitive information for identity theft purposes.

Below, are several ways to dispose of your sensitive documents without the use of a shredder. This list is provided by WigglyWisdom.com.

  1. Hand shred – tear up the paper with your hands. Make sure you tear the vital information and place it in separate recycling bins.
  2. Burn them – local ordinances can hinder your ability to do this, so be sure to check the laws for your municipality. Tear up the paper first, in the same way, you would for point #1, in case a piece of paper flies away.
  3. Compost – paper breaks down and can add carbon to your compost pile.
  4. Soak them in water – 24 hours in a bucket of water can leave your documents illegible.

There are three other items on that list if you’d like to learn a little more.

Conclusion

Bank statements and other financial documents contain incredibly sensitive information. It’s important you a) keep proper records and b) dispose of these items in a safe manner.

Related:

Earlier this year, I wrote a piece about the most important financial documents. If you’d like to learn more, go check that out here.

 

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see website for full disclosures: www.crgfinancialservices.com

How to Avoid NJ Exit Tax

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Federal income taxes are the same for every state. The only difference is how much money you make and what tax bracket you fall in.

State taxes are a completely different story because each state has its own rules. New Jersey is a perfect example with their “Exit Tax”. In this article, we’ll talk about ways to avoid NJ exit tax.


 

What’s the deal?

When you sell your NJ home and then move out of state, you have to pay the NJ exit tax.

When you sell a home, regardless of the state you live in, you have to pay tax on any gains you made. How much tax you pay depends on how long you owned and lived in the home.

According to NJMoneyHelp.com, “On June 29, 2004, New Jersey enacted P.L. 2004, Chapter 55, which requires sellers of real estate who are not residents of New Jersey to make an estimated income tax payment on the gain from the sale.”

It has nothing to do with selling and moving out of state. It’s just about selling the home and paying taxes on any gains made at the time of closing. The rule was enacted to ensure that NJ would receive the taxes owed on the property regardless if the seller was an NJ resident or not.

If you do not fill out one of the forms (see below) and pay the estimated taxes owed, the deed may be rejected.

Exemptions

There are 1 of 4 forms that you need to file when selling a home in NJ. Form GIT/Rep 3 Seller’s Residency Certification/Exemption – has 8 exemptions. The first applies to NJ residents. The remaining exemptions are listed below:

  • Real property was used as a principal residence and qualifies under IRC Section 121 of the Internal Revenue Code which excludes up to $500,000 of gain for married taxpayers, $250,000 for single taxpayers. Remember this does not include vacation or investment homes.
  • Addresses a mortgagor conveying the property to a mortgagee in foreclosure.
  • Seller is a governmental agency.
  • Seller is not an individual, estate, or trust, i.e. corporation, partnership, etc…
  • Total consideration is $1,000 or less
  • Gain from the sale will not be recognized if qualified under Sections 721 (contribution to a partnership), 1031 (like-kind exchanges), 1033 (involuntary conversions) and non-non-like kind property received
  • Transfer is by an executor/administrator of an estate pursuant to decedent’s Will

If one of these exemptions doesn’t apply to you, then you’ll have to pay tax on the proceeds and fill out Form GIT/Rep 1 or 2.

Conclusion

There are several ways to avoid NJ exit tax, but if you don’t qualify for one of those ways, make sure you fill out one of those forms and pay the taxes due.

Related Reading:

Should You Report Income From the Sale of Your Home on Your Income Taxes?

How is Passive Income Taxed?

Why Financial Literacy is Important

When are Per Diem Payments Taxable?

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Per diem payments are used when businesses have employees that travel. These payments are designed to relieve the employee from certain costs associated with traveling. Particularly meals and incidentals (ground travel, laundry, room service, etc.), and lodging.

This is great for both the business and the employee, but there are certain situations when per diem payments are taxable. In this article, we’ll explore exactly when an employee will pay per diem tax.

Two types

There are two types of per diem payments, meal-only, and meal and lodging. The names imply their use. One pays for meals, the other pays for meals and lodging.

It’s important that we specify the meals must be “non-entertainment related” meals.

Stipulations

As with many parts within the tax code, per diem rules are very specific. Meals and lodging have different rates.

Also, different cities have different rates. These differences are typically relegated to “big cities” and “small cities”, with bigger cities getting the larger rates. This is referred to as the high-low method. Businesses may also make payments based on the state in which you travel.

The per diem payments must be equal to or less than the federal allowable limit (depending on what method is selected). The employee is responsible for filing an expense report within 60 days. The expense report needs to include, date and location of the trip, purpose of the trip, and lodging receipts (if the meal-only option is selected).

You’re not allowed to “transfer credits”. What’s meant by this is if you use less on your lodging than is allotted, you can’t use the excess on food, or vice versa.

Tax Consequences

As I mentioned in the introduction, per diem payments can have tax consequences.

  • If per diem payments over the limit are taxable on the employee’s wages
  • If an expense report isn’t filed, or the filed expense report doesn’t include the required information, those per diem payments become taxable to the employee.
  • If the employer allows you, the employee, to keep whatever you don’t spend.

If you travel for business and receive per diem payments, just make sure you keep good records, and you hang onto your receipts. It’s better to have too much information than not enough.

Related reading:

Some Often Overlooked Tax Deductions for Busines Owners

Top 5 Overlooked Tax Deductions You Should Be Using

Why Financial Literacy is Important

 

*Be advised: Securities America and its representatives do not provide tax advice. Please consult a tax professional for specific information regarding your individual situation.

Should You Report Income From the Sale of Your Home on Your Income Taxes?

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is money from the sale of your house considered income

The United States tax code is complex. Many taxpayers have trouble figuring out what does and doesn’t need to be reported as income, particularly if the money is related to the sale of personal property. In many cases, the value of a person’s home goes up in the years after they buy. When this occurs, there is a financial gain from the sale, creating a profit. If you’re asking yourself, “Is money from the sale of your house considered income?” here’s what you need to know.

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Why Your Will Should Be Up To Date

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With the Coronavirus making its way through countries and countless healthcare systems, it’s a good opportunity to check in with everyone about their will and general estate planning.

We’ve written a couple of posts about the finer details of estate planning, but one of the most important things you can do is make sure that you have an updated will.

Beneficiaries

A beneficiary is anyone that will receive an asset, or assets when you pass away. You will have beneficiaries listed on your retirement accounts and life insurance policies. They can also be added to brokerage accounts via a Transfer on Death (TOD) designation.

It’s important to note that beneficiary designations and TOD designations bypass probate. The assets that the deceased owned at the time of death do not need to go to court. They go directly to the beneficiary (beneficiaries) listed on the account.

So…why is it so important to keep your beneficiaries up to date? The obvious answer is because life changes all the time.

Life Changes

People get married, divorced, re-married, etc. People have kids or marry someone that already has kids. The more grim circumstance is when a beneficiary predeceases you. It’s unfortunate, but something that does happen.

When you assign beneficiaries, there is often a box you can check labeled “per stirpes”. This simply means that if one of your beneficiaries passes before you do, that beneficiaries portion would be received by their children instead.

Not only can changes take place with your beneficiaries, but they can also change with the people you’ve entrusted with your estate. Roles like the power of attorney and executor.

Again, people can pass away before you and/or relationships can fall out of favor.

When it comes to your assets, those change often too. Good or bad years in the stock market can see drastic fluctuations in portfolio value.

Moving will change your residence, but it can also change your net worth depending on the value of your new home and how much you owe on that home. Remember Finance 101? Net worth = assets – liabilities?

Consequences

There could also be consequences for not having an updated will. The wrong beneficiaries could receive assets. Your power of attorney could be your brother and not your sister.

You actually have a much higher net worth than you thought, so now your heirs will have to pay estate taxes. Had you known that, you could have taken advantage of the gift tax exclusion and shared your wealth in order to bring your net worth down to avoid taxes.

To sum things up, you need an updated will because the items within it are going to change…plain and simple.

Related Reading:

How Long Should You Keep Financial Records After Death?

Your Estate and Your Family

Where Your Property Goes When You Die

401k Withdrawal Taxes and Penalties

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The 401k has grown in popularity over the last couple of decades because pensions have all but vanished; as a result, strategies around taking withdrawals and how to limit taxes and penalties are extremely prevalent.

In this article, we’re going to discuss the common penalties and taxes, and some of the strategies you can deploy to reduce them.

When a penalty typically applies

In almost all cases, a penalty applies if you withdraw from your account before the age of 59 ½. This is a 10% tax penalty. (Be advised: All withdrawals are subject to ordinary income taxes)

There is also a tax penalty if you fail to withdraw your Required Minimum Distribution (RMD). This applies to individuals over the age of 70 ½. This penalty, however, is 50% of the amount you should’ve withdrawn.

There are several exceptions, however.

Additionally, with the new Secure Act, there have changes to required minimum distributions, contributions, and others. For more information, click here.

When you are exempt from penalty

  • Withdrawal after 59 ½
  • Left employer after 55
  • Left employment in public safety after 50
  • Death distributions: your beneficiary is able to take distributions without penalty, regardless of their age
  • Totally and permanently disabled as defined by the IRS
  • 72t rule – Agree to withdraw the same amount for a fixed period of five years or until you turn 59 ½, whichever is greater.
  • Unreimbursed medical expenses: You’re allotted to withdraw the unreimbursed medical expenses minus 10% of your adjusted gross income
  • If you over contribute to your retirement plan for the year, you’re allowed to withdraw the excess without incurring a penalty.
  • IRS Tax Levies
  • Divorce: Depending on your state and how you settle the divorce with your former spouse, he/she can withdraw their respective portion without penalty
  • Roth conversion: you pay taxes on the conversion, but there is no 10% tax penalty

*All exceptions may have certain requirements that need to be met to qualify for the exemption. Please check with your 401k Plan Administrator and Financial Advisor regarding your personal situation.

Taxes

With regard to tax-saving strategies on 401k withdrawals, there are no short-cuts or exceptions like there was for the penalty section.

The best way to save money on taxes when taking distributions is to be strategic.

If the expense you are withdrawing for is something that can be planned ahead of time, determine your current tax bracket, figure out how much you’ll need at that future date, and withdraw slowly over time (how much you withdraw depends on how soon you’ll need it).

For example, if you are in the 22% tax bracket, are $10,000 from going into the next bracket, and need $40,000 for a down payment in 4 years, then withdraw just under $10k each year.

This assumes that your income and tax bracket will stay the same.

Another way to go about it is to utilize Roth conversions. If the intention is to minimize or eliminate your tax liability for retirement, do a Roth conversion every year. Just be mindful of where you are in your current bracket, so you aren’t bumped into the next one.

In this example, however, it can be counter-intuitive because in most cases, your tax bracket in retirement is lower than it was while you are working. This is commonsense, though. You’re making less, so logically you would be in a lower bracket.

With regard to taxes, it comes down to math. If you need to withdraw from your 401k, crunch the numbers and figure out how you can do that while limiting your tax exposure.

Related reading:

How to Save Money Effectively

Business Retirement Plan Guide

*Be advised – Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Why I Love The Roth IRA

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The Roth IRA started in 1997 and it changed the retirement savings game.

It’s probably my most recommended retirement savings vehicle, other than your employer-sponsored plan of course. You have to get that match!

The Roth IRA can be your primary retirement account or a nice complement to a work-based plan.

Here’s why I love the Roth IRA.

Tax-free withdrawals! That’s right, if you save for retirement using the Roth IRA, you get to take that tax-deferred (don’t pay taxes while money grows) savings out of your account without paying taxes.

While you’re working, you generally have two options (besides contributing to your 401k or Simple IRA) do I contribute to a Roth IRA or a Traditional IRA? The amount of money you make plays a little bit of a factor, as the Roth IRA has an income limit ($137,000 – single, $203,000 – married filing jointly).

However, a back-door contribution is available. That’s where you make a contribution to a traditional IRA and roll the money from there into a Roth IRA. Be advised: You’ll be taxed at the time of the rollover.

That aside, contributions to a traditional IRA are tax-deductible (an income limit applies here). Conversely, contributions to a Roth IRA are not tax deductible.

Here’s why I like to recommend the Roth. I’d save for retirement, without getting that tax-deduction and pay $0 taxes upon withdrawal in retirement. At that point in time, your ability to earn more money is either dramatically reduced or gone completely.

It’s at this point when you need that money the most. I’d rather pay for it now and benefit from it later.

With all that said, I suppose I should list all the characteristics of a Roth IRA.

  • For 2019, the contribution limit is $6,000. If you are 50 or older, you can contribute an extra $1,000. Be advised: these contributions limits change often. Consult the IRS website for up to date information.
  • Because the money in the account was already taxed, there are no mandatory withdrawals. Uncle Sam got his cut already so you can let that baby grow for as long as you want.
  • If you withdraw before 59 1/2, you’ll pay a 10% tax penalty
  • There are exceptions to this penalty, however.
    • Death
    • Disability
    • Use up to 10% on your first home purchase
    • Pay for higher education
    • Medical costs are more than 7.5% of your AGI
    • Can pay health insurance premiums if you’re unemployed
    • The IRS has a tax levy against you
  • You can make contributions for the prior “tax” year up to April 15th.
  • If you withdraw your savings within 5 years of your first contribution, you’ll pay some taxes on your withdrawal.
    • Note: The 5-year clock starts ticking on January 1st of the year you made your first contribution

Conclusion

As I said, the Roth IRA is a great savings vehicle. Whether you use it on its own or use it as a complement to an employer-sponsored plan, it has a place in everybody’s retirement plan.

One last thing I want to mention. My reasoning behind why I recommend the Roth IRA so often is my personal belief. Please use your situation and your money/retirement philosophy when making this decision. It also pays to talk to a professional to see what they’re thoughts are, as well.