You can do better. You deserve better.
A week ago I sat down at my computer to do my duty as a patriotic, slightly irritated, American and file my taxes. Filing my taxes always leaves me feeling a little like Oliver Twist begging for more. My first experience with income tax occurred in college — while my parents still lived overseas — so I didn’t even have parental guidance to lean on. I picked up the paper forms from the campus post office and proceeded to pull my hair out for several hours whilst trying to figure out what all the boxes and numbers meant. I couldn’t tell you if I got much back, it would’ve probably been in the ballpark of $150, but the experience left me admiring those who understand tax code and know how to find loop holes.
Five years later and I’m still searching for ways to keep my hard-earned dollars away from the clutches of Uncle Sam, all while doing my own taxes of course.
This year, I finally did something I should’ve done long ago that made the difference between owing my State and Country nearly $650 verse having them pay me just over $800. What happened this year you ask?
I fully funded a traditional IRA.
Yes, TRADITIONAL IRA.
Overwhelming, the advice is for young investors to throw their excess cash towards a Roth IRA. I’m down with Roth. In fact, my 401(k) is a Roth account, but that does diddly-squat (self-five for using that term) when it comes to helping with taxes. Why, you ask? Well, let’s break down the difference quickly.
Read the rest at brokemillennial.com.