Open AccessInvestment Strategies For Tax Diversification: Dont Put All Your Eggs In One Tax Basket
Author(s) -
J. David Ashby,
Darla G. Williams,
Terrye A. Stinson
Publication year - 2010
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v8i1.666
Subject(s) - taxable income , economics , indirect tax , tax reform , diversification (marketing strategy) , deferred tax , tax credit , value added tax , ad valorem tax , direct tax , state income tax , public economics , monetary economics , business , gross income , accounting , marketing
Traditional analysis on the use of Roth accounts often focuses on the expectations of tax rates in the future. However, tax diversification into tax-free accounts such as the Roth accounts may make sense independent of expectations regarding future tax rates. This is due to the taxation of Social Security benefits and the laws relating to required minimum distributions for traditional retirement accounts. Many taxpayers may find their overall income tax burden lighter in the retirement years by making use of taxable, tax deferred and tax-free investment accounts.