Tips for tax time
Rick Rodgers, a retirement counselor and author of the new book "The New Three-Legged Stool: A Tax Efficient Approach To Retirement Planning," offers this advice for tax time:
•Reduce your tax withholding at work by the amount of your tax refund and save amount monthly. Monthly compounding instead of annual compounding grows even faster.
•Do not defer your income in a 401(k) plan if you are in a 15 percent tax bracket unless your employer matches the amount you save. Save the money in a Roth IRA instead.
•Invest in stock mutual funds for money saved outside of a retirement account. Most of the earnings on stock funds are either in the form of qualified dividends or long-term capital gains. Both types of income are taxed at 0 percent in a 15 percent tax bracket and a maximum of 15 percent in higher tax brackets.
•Give money directly to a charity from their IRAs for taxpayers who are age 70½ with IRAs. Making charitable gifts this way keeps the taxable income off your tax return. This could lower the amount of your Social Security benefits that are subject to tax.
In Wall Street Journal Sunday
MarketBeat by Dave Kansas: Ten ways to play a market correction. Page D3
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