Paying taxes is a legal requirement for any individual who is earning wages in any country. But it is not very easy to give out your hard earned money to government or anyone in that matter but what if you could save and not pay taxes? When this is the case, everyone looks for a solution where they could just do some financial planning that does not require tax paying. And well you do not have to find a secret way to do so, there are a few ways that you could save some bucks on taxes and also it is entirely legal to do so which is what we are going to explain you here.
Tax-free savings account:
Many banks across US gave started the facility of providing tax-free savings account. In these accounts you can contribute up to $5500 every year. You are not charged for any withdrawals at all that is called as the withholding tax. These savings accounts are the ones best for young people who want to accumulate little by little for the future. She. It is near retirement you can save enough that you can live further with ease.
Roth IRA:
If you are plan in hon retiring rich, then one way to do it by using Roth IRA investment program. Yes all the contribution to it are free of tax and yes You start taking the contributions back if they will also seem to be tax-free. This is a win-win situation for everyone. So you can invest $5500 every year and also if you are over 50 then you can contribute $6500. Which is a lot more than any other if the retirement program around. However, there is one catch, if people are earning high wages, then they are not available for the Roth program, and this is there to prevent the needy to take care of themselves without worrying that the most chunk of their investments is not going to end up in the pockets of wealthy.
Municipal bonds:
When the city needs cash for its development, it is a good news for people who are looking for tax-free investment. That is when municipal bonds come in. These municipal bonds are tax-free and to protect your money, it is best not to buy just one municipal bond but diversify and buy a few of them. Some of these bonds are also backed by the insurance which means that if some clarity falls like the city of Detroit claimed bankruptcy, your investment will be safe. You can buy bonds from the city or state in which you live. This is the solution for people who would like to keep it legal and as well as tax-free. Making sure that their investment is safe and also risk-free.
529 Plans:
When we are looking at the financial planning and also want to tax-free, it is best to say that there is one way to make sure that when you are saving for your kid’s college, you can pick any one of the dozens of 529 plans and that would for sure keep you afloat. Also, if the expenses can be proven to be used for educational expenses that include housing and lodging, then one thing is for sure that any profit from the investment will also be tax-free. This is one thing no one ever really resist.
You can combine all of these four options and plan for the tax-free retirement and also save a lot especially when you are saving for the college funds of the children.
These all options that you have for financial planning and keeping all process legal and acceptable will help you solve the dilemma about the financial planning without paying any additional taxes. You can take your pick of any investment or insurance that you consider is going to fit your needs and your circumstances, because everyone has a different way of taking a look at their financial conditions. Along with all this, you can always get the help of the accountant or a CPA firm that can help you find the right choice.
