411 REFERENCE · Wikibooks
Investing/Tax advantaged investing
Reference material by Wikibooks contributors. This retains its source identity and is not 411 news reporting.
There are three types of tax advantages that one can possibly gain when investing.
Tax Reduction Now
Tax Deferred Growth
Tax Free Withdrawals
Tax Reduction allows one to take the investment and deduct directly from the income reported to the IRS.
Tax Deferred Growth allows someone to postpone paying taxes on the capital gains, interest, or dividends from an investment until one takes a withdrawal.
Tax Free Withdrawal is the ability to withdraw funds from an account or sell an investment without paying taxes on the gains within the investment.
Other topics that are important:
Marginal Tax Rates vs. Average Tax Rates
Capital Gains - Long Term vs. Short Term
Dividend Tax Rates
Interest Tax Rates - Corporate, Municipal, Federal
Real Estate Depreciation and effects on taxes
Types of Tax Advantaged Accounts
Traditional IRAs
Roth IRAs
Simple IRAs
SEP-IRAs
401k Plans
Roth 401ks
Defined Benefit Plans
Profit Sharing Plans
Annuities
Life Insurance Wrappers