Nondeductible IRA contributions are similar to a Roth IRA in the sense that contributions are made after tax in both cases. The huge and extremely important difference is that the earnings on nondeductible contributions to a Traditional IRA are fully taxable at distribution, while the earnings on Roth IRA contributions are tax-free.
The minimum tax credit, or MTC, is a non-refundable tax credit created when AMT is paid on deferral items. In tax years after AMT is owed, the MTC is recovered by reducing the taxes you otherwise would owe. It could take just one year to recover your MTC, but it often takes several years, even decades.
HSAs are often touted as the best tool for tax deferral since if contributions are made by payroll deduction, they aren’t subject to federal income tax or payroll taxes. But in California (and New Jersey), HSA contributions aren’t exempt from state income tax.
When RSUs vest, the full value of the shares (number of shares vesting times the share price) is taxed as wage income. This is exactly the same as how an equivalent cash bonus is taxed.
With Memorial Day Weekend upon us, it's officially time to say hello to Summer. If you're planning to travel soon, understanding the current travel market will prove helpful. Here is a quick breakdown of the travel industry's condition.
It’s common for financial advisors to recommend rolling your 401k over into an IRA when you leave a company. There are many sound reasons why you should – consolidating accounts, better investment availability, costs, and more control over your account to name a few. However, that doesn’t mean a Rollover IRA is always the way to go.
