Income Tax Planning and
Stock Market Investing
The pre-class preparation for this session involves using information found on the Web to answer a series of questions. Those questions, and the locations on the Web of the answers, are listed below.
1. What is the primary benefit of a Traditional IRA?
Go to Wikipedia at en.wikipedia.org. Find the entry on “Traditional IRA.” The first paragraph describes the “best provision of a Traditional IRA.”
The tax- deductibility of contributions has strict requirements based on income, filling status and availability of retirements plans. Some transactions are not subject to tax.
2. What happens to you if you withdraw money from a Traditional IRA before age 59 ½ ?
Go to Wikipedia at en.wikipedia.org. Find the entry on “Traditional IRA.” You will find a section that lists the “Disadvantages” of a Traditional IRA. Look at the 2nd to last bullet item in this list.
IRS will assess a 10% early penalty if you are under 59 and a half.
3. Are contributions to a Roth IRA tax deductible?
Go to Wikipedia at en.wikipedia.org. Find the entry on “Roth IRA.” You will find a section that lists the “Disadvantages” of a Roth IRA. The answer to the question is given in one of the first two or three bullet items in this list.
No they are not tax deductible.
4. For an employee with a tax rate of 25%, how much is the short-term income tax savings that comes from a $3,000 contribution to a 401(k) account?
Go to Wikipedia at en.wikipedia.org. Find the entry on “401(k).” You will find a section that describes the “Tax consequences” of a 401(k) plan. Look in the second paragraph of this section.
5. How large was the annualized return on investment that was promised to “upgraded” members of 12daily Pro?
Read about 12DailyPro at the following website:
Read the Ponzi scheme and then scroll down to the External Link
U.S. Securities and Exchange...