The Rich TAX LoopHole, the Backdoor Roth IRA! Yes, this is a method used by the wealthy who cannot qualify for a regular Roth IRA. This method allows you to save hundreds of thousands of dollars on taxes, and its relatively simple. All you have to do is create both an IRA and a Roth IRA account, preferably at the same financial institution. then you fund your IRA, and transfer those funds to a Roth IRA. The key is that you make INDIRECT contributions to your Roth IRA, rather than DIRECT contributions! AWESOME! BUT! there are some key notes you have to look out for. In this video I cover what these accounts are and how you can take advantage of them in order to save on your tax obligations! SEEKING ALPHA LINK (59% OFF!!) with a 7-DAY FREE TRIAL CHAPTERS: 0:00 Introduction 0:20 Roth IRA 0:38 Traditional IRA 1:00 The benefits of Roth IRA & Examples 3:05 The PROBLEM with Roth IRA 3:33 Backdoor Roth IRA - the method 4:08 HOW to convert your funds from Traditional IRA to a Roth IRA 5:53 Potential downsides of doing backdoor Roth IRA 6:05 The PRO RATA Rule & examples 8:11 Conclusion on Backdoor Roth IRA Note: ALWAYS Consult a TAX Professional / Financial Advisor! ETSY SHOP: T-Shirts & Digital Planners (Designed by me) PUBLISHED Financial Planners to make it easy to set financial goals, allocate money towards savings & investments, track your income and expenses, tax deductions and more! : Investor: Wolf: Green: Pink: DISCLAIMERS & DISCLOSURES: This content is for education and entertainment purposes only. Viktoriya is not a financial advisor and does not provide any financial, tax or investment advice. The information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. Past performance is not indicative of future results. All investing involves, risk, including the possible loss of principal. THUMBNAILS are created only for entertainment purposes, and act as art. They are NOT a direct quote from any financial/public figure. Below you will find links that will allow you to find items mentioned on my channel and receive free trials, perks and discounts. I may get a small commission at no cost to you. LINKS to my online brokerage accounts are HERE: WEALTH SIMPLE ( EARN UP TO $3000 WHEN YOU USE THIS LINK) INTERACTIVE BROKERS ( EARN UP TO $1000 IN IBKR STOCK (Interactive Brokers Stock)) LINK: LINKS TO FINANCIAL LITERACY BOOKS MUST READ! Becoming Your Own Banker: The Intelligent Investor: The Simple Path to Wealth: THE OPTION WHEEL STRATEGY: (If you want to learn about the MOST POWERFUL TRADING STRATEGY IN THE WORLD!!!) COVERED CALLS for BEGINNERS: Investing for Dummies: Original - 9-in-1 Books- Rich Dad Poor Dad: LINKS TO RESOURCES & MY EQUIPMENT: Get 1 month FREE to Epidemic Sounds, where I find all of the sound tracks for my videos! CANVA: I create thumbnails & ALL marketing material with Canva Tubebuddy: for SEO MY EQUIPMENT: CANON EOS RP Mirrorless Camera: CANON 24-105mm f/4 LENS CANON LENS Adaptor: Microphone: TRIPOD: LED Lights: LG 29" ULTRA WIDE Monitor: 14" Portable Monitor : Apple Magic Track Pad: Apple Magic Keyboard: ...(read more)
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Taxes are one of the biggest expenses in our lives. Fortunately, there is a way to lower your taxes by using a backdoor Roth IRA. This is a powerful tool that can help you pay less in taxes, both now and in retirement. In this article, we'll explain what a backdoor Roth IRA is, why it's beneficial, and how to set one up. What is a Backdoor Roth IRA? A traditional Roth IRA is a type of retirement account where you contribute after-tax dollars. The benefits of a Roth IRA are that you don't have to pay taxes on the earnings or withdrawals in retirement. However, if you earn too much, you can't contribute to a Roth IRA. In 2021, the income limit for single filers is $140,000, and for married filing jointly, it's $208,000. This is where the backdoor Roth IRA comes in. A backdoor Roth IRA is a loophole that allows high earners to contribute to a Roth IRA, even if they exceed the income limits. This is done by converting a traditional IRA into a Roth IRA, regardless of income. The Best Time to Use a Backdoor Roth IRA The best time to use a backdoor Roth IRA is when you expect to have a lower income in the future. For example, if you're a high earner now, but plan on retiring in the next few years, your income will drop, and you'll be in a lower income tax bracket. This makes it an ideal time to do the conversion to a Roth IRA. Another ideal time is when you're just starting your career and expect to earn more in the future. Since you won't be able to contribute directly to a Roth IRA, you can start with a traditional IRA and convert it later when you're earning more. How to Set Up a Backdoor Roth IRA Setting up a backdoor Roth IRA is a simple process. You'll need to follow these steps: 1. Open a Traditional IRA: You can open a traditional IRA with any investment firm. 2. Make Contributions: You can make contributions to the traditional IRA, up to the annual limit of $6,000 per individual or $7,000 for those over age 50. 3. Convert to a Roth IRA: Once you've made contributions, you can convert the traditional IRA to a Roth IRA. The conversion will be treated as taxable income and you'll need to pay taxes on the amount converted. 4. Pay Taxes: The taxes owed will depend on your income level and the amount converted. To avoid any penalties, make sure to pay taxes on the conversion before the deadline for filing your taxes. In conclusion, a backdoor Roth IRA is a powerful tool that can help lower your taxes. By converting a traditional IRA to a Roth IRA, high earners can take advantage of the benefits of the Roth IRA, even if they exceed the income limits. It's essential to consult with a financial advisor for guidance on your specific tax situation and make sure that a backdoor Roth IRA is right for you. With proper planning, a backdoor Roth IRA can be an effective strategy for reducing taxes and securing your retirement. https://inflationprotection.org/do-this-now-utilize-a-backdoor-roth-ira-to-decrease-taxes/?feed_id=95586&_unique_id=64593bfe6b159 #Inflation #Retirement #GoldIRA #Wealth #Investing #2023 #backdoorrothira #BuildingWealth #capitalgainstax #dividendinvesting #dividendtax #financialliteracy #howtosavemoneyliketherich #income #incometax #ira #iravsrothira #lowertaxes #MoreDividendIncome #Moreincome #nonqualifieddividends #passiveincome #qualifieddividends #retireearly #Retirement #retirementplanning #retirementsaving #RichTaxsaving #RothIRA #SavingsAccount #tax #taxondividends #TaxSavings #VanguardIRA #2023 #backdoorrothira #BuildingWealth #capitalgainstax #dividendinvesting #dividendtax #financialliteracy #howtosavemoneyliketherich #income #incometax #ira #iravsrothira #lowertaxes #MoreDividendIncome #Moreincome #nonqualifieddividends #passiveincome #qualifieddividends #retireearly #Retirement #retirementplanning #retirementsaving #RichTaxsaving #RothIRA #SavingsAccount #tax #taxondividends #TaxSavings
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