As I contractor, I don't have a 401(k). However, I do make ok money. What I would like to do is find out what options I have to lower my overall tax burden AND contribute to an investment vehicle. Overtaxing = bad.
2006-09-15 01:58:27 · 4 answers · asked by Annoyed 1 in Business & Finance ➔ Investing
You can establish a traditional IRA. Contribuitions to it are tax defered as is the income that it generates. You can invest in municiple bonds. All income from those are tax exempt from federal taxes. You can invest in sound stocks with good growth prospects long term and leave your money in them. No tax on captial gains until you sell. Dividends are taxed at a favorable rate compared to regular income. You can establish a Ross IRA. There is no tax ever on income that is generated in a Ross IRA, but contributions are after tax. You can invest in rental properties. Depreciation shelters most of your income.
Those are a few ideas.
2006-09-15 02:08:15 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Sfred is right ! An IRA is your answer AND it will help secure your future as well. Self employed people need to be thinking about this LONG before retirement !!!
During the coarse of the year however, being a contractor myself, I put away money for tax time for I know IT'S COMING! I also accept it that I must pay taxes for I am damn glad to be making money!
On the other hand.....Do you have an accountant ? IF not then GET ONE... Ours saved us 10's of thousands with all the deductions we didnt know about. (the laws and deductions change often and I do not have the time nor the desire to keep track of it all) Keep in mind : Always have people smarter than you working for you... for you have nothing to gain from idiots ! An accountant fits that profile and ours has proved to be a valueable asset in our business ! He is the BEST !
2006-09-15 02:16:16 · answer #2 · answered by Kitty 6 · 0⤊ 0⤋
Set up a retirement plan. SIMPLE-IRA, SEP-IRA, KEOGH, Traditional or ROTH IRA, etc. Depends on your situation, look into the SIMPLE one first.
2006-09-15 02:04:42 · answer #3 · answered by sfredbook 3 · 1⤊ 0⤋
talk to the bank
2006-09-15 02:00:05 · answer #4 · answered by BE QUICK! 1 · 0⤊ 0⤋