Tax Planning

In this complex world in which we live it is required for the tax planning to be an important part of every financial program. In fact, the tax aspect of any investment must always be taken in account because of its incidence on the total of the profits.

The Individual Retirement Account (IRA)
It may be that the Ira is the greatest tax shelter put at the disposition of the small taxpayer. At first, any physical person that would receive remuneration could establish an account of this type. However, with the passing of time this original concept has evaluated to the actual IRA, which presents three basic forms:

  • The normal IRA. Which is the most common of them all and every worker whose company or patron doesn’t offer him an acceptable retirement program and that receives a corrected gross income below the 80,000 dollars (160,000 in the case of couples) has an access to it.
  • For each IRA, as much as for the working tax payer as for his non working wife, has the character of deducting all contributions in an amount that won’t exceed the   2,000 dollars a year.
  • The refunding done before reaching the 59 and half years are subject to a 10% of penalty unless that the buying of the first home or to pay superior studies causes them.
  • The refunding will start to be effective on the last day in which the tax payer reaches its 70 and a half years of age.
  • The ultimate benefit pursued is the accumulation of funds on the base of deferred taxes.
  • The educational IRA. The parents do not necessarily establish it, but the non-deductible contributions have a limit of 500 dollars per year per beneficiary. The distributions are not subject to the personal income tax if they are used for paying university studies and they can be used jointly with other IRA.
  • However, it is impossible to accede to an educational IRA if your gross corrected income and “modified” exceeds the amount of 110,000 dollars (150,000 in case of couples). Here, the goal pursued is the accumulation at a long term of funds exempted from takes and destine to a concrete objective.
  • The Roth IRA. The contributions are non-deductible, and physical person whose gross corrected income exceeds the amount of 100,000 dollars (150,000 in case of couples) doesn’t have an access to it. The main benefit that this type of IRA reports is, definitely, the tax free accumulation of funds that might never be subject of personal income tax, due that the refunding are not charged with the 10% of penalty nor with the personal income tax if the contribution was made five years before the refunding and that are given on the following circumstances.
  • That the contributor has more than 59 and a half years of age,
  • That the refunding is destine to the buying of the first home,
  • That the refunding is done at the posterity of the death or incapacity of the holder.