The world of investments can be intimidating, especially for young adults and college students. However, it is known that one of the best ways to build long-term wealth is to start investing early. Doing will allow your money to compound interest for a longer period of time. More than anything, knowing investment tips will help you get started.
Invest in a High-Yield Savings Account
This investment tip is great for those who are just getting started and may be hesitant to try stock trading. Like a traditional savings account, a high-yield savings account pays interest on your account balance. The main difference is that the rates of a high-yield savings account are far higher than those of a traditional account. In fact, the rates are 20-25 times the national average of traditional accounts. This investment is ideal for building an emergency fund or safety net. It is money that is not meant to be touched but is still easily accessible when needed.
Open an Individual Retirement Account (IRA)
College days may seem early to begin thinking about retirement, but the sooner you start saving the better. One of the best ways to begin retirement savings is through an IRA account.
Traditional IRA accounts allow tax-deductible contributions on state and federal tax returns for the year the contribution was made. When you withdraw the money for retirement (beginning at 59 ½ years old), you will be taxed at that income tax rate. This is important to consider as some people will be in a higher tax bracket when they retire because of Social Security benefits, investment income, and more.
Roth IRAs are usually more popular with young adults because the earnings and contributions to the account compound tax-free. In other words, you pay taxes on the money before you contribute so you don’t have to pay it later. However, your contributions do not qualify as tax deductions. This option is also better for those who anticipate being in a higher tax bracket at retirement age.
Invest with a Robo-Advisor
This investment tip is ideal for those who want to invest through a brokerage account for cheap without doing a ton of research. Robo-advisors use artificial intelligence to create one-of-a-kind investment portfolios based on your goals. These goals are determined by amount of time left before retirement and risk level. This option usually does not require paying fees for small accounts, so there is not much risk involved in getting started. However, you may be required to pay a small percentage of your assets each year once you reach a certain account balance.
Tax Relief for Investors
The best investment tip is to always ensure you are compliant with tax laws and to report your investment earnings each year. Optima Tax Relief is the nation’s leading tax resolution firm with over $1 billion in resolved tax liabilities.
With a massive increase in taxpayers filing for an extension, what does this mean for people who owe? How does the extension deadline work? Hosts CEO David King and Lead Tax Attorney Philip Hwang discuss these details and more in this week’s episode. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure.
While stocks may seem like an effortless path toward financial stability, they do affect your taxes. Understanding what’s expected when you file can keep you out of trouble with the IRS.
While taxes are inevitable, you want to make sure that you’re not paying more than you have to. You can legally reduce your taxes by using strategies that you may not be aware of.
Worried about the IRS garnishing your refund? There are a few instances where this could happen. CEO David King and Lead Tax Attorney Phil Hwang discuss these circumstances and what you should do if you’re thinking your refund could be at risk for IRS seizure.
The responsibility of payroll taxes falls on the shoulders of employers, although they come from employee paychecks. The federal government, Social Security and Medicare heavily rely on taxes from employee wages.
IRS revenue officers are now tracking how unpaid payroll taxes were spent during their “trust fund investigation.”
Payroll Taxes Used for the Employer’s Benefit
Employers will now face more penalties for payroll fraud. This can include wrongfully spending payroll taxes or pocketing it for themselves. Maintaining a luxury lifestyle while owing payroll taxes can now lead to prosecution.
Revenue officers are being instructed to pull employer 1040 tax returns to learn whether the money that benefited them was reported as income. If the money was not reported as income, the RO will submit the returns and investigation records to the civil audit division. Another option is that the RO will refer the case to the IRS Criminal Investigation Division to review for criminal prosecution. The course of action made by the RO depends on the severity of the case.
What This Means for Business Owners
Business owners should utilize their tax professionals and seek advise to avoid any possible criminal activity. It’s important to review and track where the payroll money goes for the year. If you know that some of your payroll tax money went to yourself as an employer, you should prepare to amend your income tax returns before the IRS catches up to you.
Avoiding handling this matter could put you in a worse financial situation, or even lead to prosecution.
Payroll Tax Debt
If you are currently in unaffordable tax debt, Optima’s team of tax professionals may be able to aid your case. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
