When I started investing, I was concerned about picking the right stocks, mutual funds, and ETFs; matching any financial goals with the right asset allocation; and holding down investment fees. Those issues are important. But I also have learned not to overlook the impact of taxes on investment returns. That said, I can’t be so concerned about taxes that I’m paralyzed from making an investment move. But it helps to consider how investment decisions impact tax liability, both in the present and for the future.
Category: Retirement Planning
I’m not a tax expert but my understanding is that, generally, you need to have earned income (or some form of taxable compensation) to contribute to an IRA. If you’re working full-time in a regular job, then you may have enough earned income to make a full contribution of $5,500 as long as you meet other requirements. But if you work part-time, then you may not make enough to contribute this amount; still, you may be able to contribute up to the amount of your earned income.