It can be frustrating that after working so many hours you receive your check at the end of the week, and see the amount of money that is taken in taxes. Don’t you think there should be a solution so that this doesn’t happen, at least with part of the money? Well, there is!
Have you heard the word DEFER? Well, it’s like postponing, in this case, your taxes. It is a method available to every person with a valid social security number in the United States to avoid paying taxes now on part of their earnings. Simply put, save for retirement, and the IRS will take fewer taxes and even give you extra credit in some cases.
How does it work? Well, creating an independent retirement account. There are several and the best known is by its acronym: IRA (Individual Retirement Account). With this type of savings account you will be able to have save for your retirement money that social security does NOT offer you.
The Social Security Administration admits on its site that the money you will receive once you retire is only 40% of the income you had before you retired. Where do you think you will receive the other 60% you need to live?
Well, one of the most common solutions is to invest in your retirement. It will help you pay for what your Social Security doesn’t cover, and also get more money in your refund at tax time today. Yes, you can “kill two birds with one stone.”
A small example, if you decide to save (NOTICE: it is NOT a regular savings account at your bank) for your retirement in one of these accounts, about a thousand dollars, the IRS will generally return an extra $200 dollars. It means that you still have your thousand saved and you are already receiving $200 in benefits. If there are two thousand, you will receive an extra $400, and so on, until you reach the maximum that you can save, which depends on your particular situation.
And you’re still in time for this season! You only have to act BEFORE April 15, even if you have already filed your taxes.
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