Millions of Americans have already received tax refunds this year, leaving many tax filers wondering how they should spend or invest the sudden windfall. Strategic Wealth Capital Founder & Managing Partner Adrianne Yamaki joins Wealth! to discuss how Americans can invest the funds.
Yamaki encourages her clients to use the extra cash on Roth conversions, a way of prepaying some of the income tax you will owe on retirement distributions while taxes are lower. The immediacy of such a tax bill can be daunting, Yamaki says, but savers will pay a lot more in tax when they eventually remove their funds from an IRA. With "taxes on sale" for another year and a half, prepaying now locks in a lower rate, Yamaki adds.
Millions of Americans have already received tax refunds this year, leaving many tax filers wondering how they should spend or invest the sudden windfall. Strategic Wealth Capital Founder & Managing Partner Adrianne Yamaki joins Wealth! to discuss how Americans can invest the funds.
Yamaki encourages her clients to use the extra cash on Roth conversions, a way of prepaying some of the income tax you will owe on retirement distributions while taxes are lower. The immediacy of such a tax bill can be daunting, Yamaki says, but savers will pay a lot more in tax when they eventually remove their funds from an IRA. With "taxes on sale" for another year and a half, prepaying now locks in a lower rate, Yamaki adds.
For additional tax savings, Yamaki encourages filers with 1099 income to write off home costs, even if they are currently renting. There is a standard home deduction, but a larger space can be calculated as a percentage of one’s home, Yamaki explains.
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