Central ND | Bruce NW Ia - 2/14/2019 16:12
1. I have spent my entire adult life buying into the theory "Pay yourself first", and did that by contributing to a SEP/IRA. (And if you stick to it, it is amazing how much it all adds up-good news.). so, contribute the $15 K to SEP/IRA.
2. Plus I kept hearing the manta "Your tax rate will be lower when you retire". That I didn't totally believe, but kept plugging away anyway. Jury still out on that, but............we'll see, said the Zen Master.
3. I am assuming that during Pres. Trump's time in office, that these will be the lowest income tax rates that we will see the rest of our lives. So, pay the taxes and run. (Also, the best advice today for a young person-pay the taxes and start a Roth IRA-not a SEP/IRA-but I digress).
4. "The 20% deduction was a MASSIVE savings"- So consider that as a gift from above, pay the taxes and run.
5. Old vet trick-cut the herd in half, treat half one way, and the other half a different way. Put $7,500 into SEP/IRA, and pay taxes on the remaining $7,500 and run.
Good luck on your decision. Regards, Bruce.
I whole heartedly agree with number 3 if you are young and below the income limit.
If a person has a high deductible health plan that qualifies for an HSA, first max out your HSA contribution. Tax deductible, grows tax free, and money out is tax free. Can be used for medical, or you can build it up until you are a certain age and withdraw for anything. Next pending youre under the income limit, max out a ROTH, if you file jointly, one for each you and your wife. You pay taxes now on contribution, but any growth is tax free, and withdraw after a certain age isn't tax free. Then after those I would do a SEP. Yes there may be times where a SEP should be done in a different order but I'm young and that's how I did it this last year. |
SEP IRA/ Tax question
