If you can afford it, one of the best ways to save money on taxes is to contribute money to tax-deferred retirement accounts. These accounts provide enormous tax benefits. The intention is to allow you to maximize the money you can save for retirement during your working years. "Tax qualified" retirement accounts comply with IRS requirements. That is to say, you can deduct the amount you contribute to a tax-qualified retirement account from your income taxes. The exception applies to both Roth IRAs and Roth 401(k)s. In addition to the deduction you receive contributing money into a retirement account, there is another tax benefit: tax deferral. You do not pay taxes on investment earnings from retirement accounts until you withdraw the funds. Because most people withdraw these funds at retirement, they are often in a lower income tax bracket when they pay tax on these earnings. This can result in substantial tax savings for people who would have had to pay higher taxes on these earnings if they paid as the earnings accumulated.
The most common type of tax-deferred retirement account is the individual retirement account or IRA. An IRA is a retirement account established by an individual, not a business. That being said, IRAs are extremely easy to set up and administer. Most financial institutions offer an array of IRA accounts that provide for different types of investments. You can invest your IRA money in just about anything. You can have an IRA whether you're a business owner or an employee in someone else's business. Moreover, you can establish as many IRA accounts as you want, but there is a maximum combined amount of money you can contribute to all of your IRA accounts each year. Changes to the maximum contribution amount adjust¬†for inflation but remained unchanged between 2013 and 2018.
However, starting in 2019, the limit on annual contributions to an IRA increase from $5,500 to $6,000. Anyone at least 50 years old at the end of the year can make additional annual contributions of $1,000 per year, for a total of $7,000. You can have an IRA even if covered by a retirement plan at work. However, if you have a workplace retirement plan, your ability to deduct your IRA contributions phases out until eliminated entirely at higher income levels. The phase-out amounts increase for 2019:
Thus, for example, if you're single and earn less than $74,000, you can contribute a whopping $6,000 to your IRA and deduct the full amount, even if you have a workplace retirement plan. You can add and deduct an additional $1,000 if you're over 50.
Like traditional IRAs, Roth IRAs are tax-deferred and allow your retirement savings to grow without any tax burden. Unlike traditional IRAs, however, your contributions to Roth IRAs are not tax deductible. Instead, you get to withdraw your money from the account tax-free when you retire (at age 59 at the earliest). You may contribute to a Roth IRA only if your income is below specified levels. If you are single and your income reaches $122,000 in 2019, your ability to contribute to your Roth IRA will begin to phase out. Once your income reaches $135,000, you will no longer be able to make contributions. For married couples filing a joint return with your spouse, your ability to contribute to your account will start to phase out when your income reaches $193,000. Furthermore, contributions have to stop when your income reaches $203,000. The 2019 phase-out ranges are $2,000 more than in 2018.
One of the most popular types of tax-qualified retirement plans is the 401(k) plan. 401(k)s are a type of profit sharing plan that a business's employees make plan contributions from their salaries. In some cases, businesses make¬†a matching contribution. Self-employed people can also establish their own solo 401(k) plans. For 2019, the contribution limit for employees who participate in 401(k) plans increased from $18,500 to $19,000. Thus, an employee may contribute up to $19,000 of his or her salary to a company 401(k). Equally, the employer can make a tax-free contribution of up to $19,000 as well. If you're over age 50, you can add an additional $6,000 to your contribution, for a total of $25,000. The self-employed and small business owners can establish solo 401(k) plans and contribute up to 20 percent of their net profit from self-employment, plus an elective deferral contribution of up to $19,000 for 2019. The maximum solo 401(k) contribution for 2019 is $56,000 (up from $55,000 in 2018). Business owners over 50 can make additional catch-up contributions of up to $6,000 per year that does not count toward the $56,000 limit.
The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.
A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!
Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.