After-tax dollars are what is left over after taxes are paid. Many businesses opt to place them in after-tax contributions. The money is deposited into a retirement account, or annuity, after all state and federal taxes are paid. Through a professional Los Angeles business sales associate, individuals can determine the best retirement plan for them.
Most retirement plans are pre-tax plans. Individuals decrease their taxable income throughout the year by how much is contributed to the plan. An after-tax plan goes in a different plan, no matter how many after-tax dollars are contributed, annual taxable income is not reduced. However, there are a variety of benefits determined by which plan is chosen.
The most popular program for after-tax dollars is the Roth IRA program. There is a key advantage of this plan even though it does not decrease taxable income on filed returns. The benefit lies in the fact that money can be withdrawn at any time, even before the age of 59.5, and no taxes have to be paid on it.
401(k) plans are also quite popular. Though mostly associated with pre-tax dollars, individuals can put in after-tax dollars also. This action would be set up through an administrator so a separation between the two types of money is distinguished.
The advantage of putting after-tax dollars into a 401(k) is that they are not taxed when taken out. Pre-tax dollars taken out of a 401(k), because not taxed when being put into the 401(k), are taxed when withdrawn. After-tax dollars become beneficial when withdrawing money during retirement.
Traditional IRA plans are the last after-tax dollar plan many Los Angeles business sales advisors discuss. Both pre and after tax dollars are accepted to this plan. It is, however, the duty of the person to record the two. Also, the IRS must be notified of after-tax dollars in the traditional IRA plan.
Most retirement plans are pre-tax plans. Individuals decrease their taxable income throughout the year by how much is contributed to the plan. An after-tax plan goes in a different plan, no matter how many after-tax dollars are contributed, annual taxable income is not reduced. However, there are a variety of benefits determined by which plan is chosen.
The most popular program for after-tax dollars is the Roth IRA program. There is a key advantage of this plan even though it does not decrease taxable income on filed returns. The benefit lies in the fact that money can be withdrawn at any time, even before the age of 59.5, and no taxes have to be paid on it.
401(k) plans are also quite popular. Though mostly associated with pre-tax dollars, individuals can put in after-tax dollars also. This action would be set up through an administrator so a separation between the two types of money is distinguished.
The advantage of putting after-tax dollars into a 401(k) is that they are not taxed when taken out. Pre-tax dollars taken out of a 401(k), because not taxed when being put into the 401(k), are taxed when withdrawn. After-tax dollars become beneficial when withdrawing money during retirement.
Traditional IRA plans are the last after-tax dollar plan many Los Angeles business sales advisors discuss. Both pre and after tax dollars are accepted to this plan. It is, however, the duty of the person to record the two. Also, the IRS must be notified of after-tax dollars in the traditional IRA plan.
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Looking for more info on how to get after-tax dollars for your Company ? Get the low down on how a Los Angeles Business Sales Broker can help on http://www.henryweaks.com
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