Bob Brinker Free Discussion Site 59,820+: Re: Re: Consider TAXES!

» Happy_2 - Re: Re: Consider TAXES!

In response to Re: Consider TAXES! posted by Kirk:
That's right. If a contribution is made by the worker it does not lower the FICA liablility. Of course, if a contribution is made by ones employer, than that does not ADD to ones FICA liablility. This would apply to matching contributions made by the employer.

Regarding investing retirement account assets, I would agree interest earning assets for the retirement account, and equities for the personal account. This is especially true with the new favorable tax rates for dividends and capital gains.

By the way, California adds a 1% penalty to early Ira account withdrawals.

Your list of 1. matching contributions to plans, and 2. Do a Roth IRA makes sense.

For myself, the issue is moot, since almost all my income comes from rents, interest, and dividends. None of these are earned income for FICA purposes.

As a practical matter, for my clients who want to do IRA's, SEP's etc. , I say DO IT. The importance of saving far out weighs the minute calculation of tax savings.

-- posted by Happy_2