One of the easiest ways to reduce the taxes you pay is to contribute to a retirement plan that allows you to make tax-deductible contributions. Such plans include 401k's, IRAs and 403b's. IRA eligibility rules are rather complex. Whether or not you are eligible to contribute to an IRA and how much you may contribute depends on a myriad of factors such as whether you participate in other retirement plans, your adjusted gross income, and your age, to name just three.
In general, you may contribute up to $5000 per year if you are under the age of fifty and up to $6,000 per year if you are over 50. If your modified adjusted gross income is over a certain level, you may be eligible to contribute less than those amounts. Very high incomes combined with participation in another retirement plan may make you ineligible for IRAs altogether.
Smart Money has created a convenient IRA Eligibility Calculator to help you determine what you can contribute. Remember that if you are investing in an IRA for tax resistance purposes, you will want to nvest in a traditional IRA. With a traditional IRA, you are able to deduct the contributions from your current taxes but will have to pay taxes on the money when you withdraw it after retirement. Most financial advisers believe Roth IRAs are a better deal: you pay taxes on the money now but withdrawals are tax-free after retirement. Roth IRAs, however, are useless as tax resistance strategies in the short term. Of course, if you believe that we will be in Iraq until we suck the last oil out of their sand, a Roth IRA may make sense for war tax resistance purposes too.
I am not a stock analyst and have no idea what the stock market will do in the future. My own gut feeling, though, is that it will not do too well. In that case, you may want to invest in commodities like oil and silver. However, please, please don't stake your retirement on my ideas.
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