Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: Discover crucial retirement tax strategies to implement before year-end!

Name: Painting Business Owners: Discover crucial retirement tax strategies to implement before year-end!
Uploaded: 2024-12-02T14:30:30+00:00
Duration: 23 s
Channel: Daniel Honan
Description: In this segment, the speakers explain the two main types of individual retirement accounts (IRAs) available to small business owners—traditional and…

2 Dec 2024 · 0 min

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In this segment, the speakers explain the two main types of individual retirement accounts (IRAs) available to small business owners—traditional and Roth—detailing how each is taxed, the annual contribution limits ($7,000 per person, $14,000 for a couple), and the strategic choice between taking a tax deduction now versus enjoying tax‑free growth later. They emphasize the importance of acting before the year‑end deadline to secure a contribution, and they recommend the Roth IRA for those who can afford to defer taxes, while suggesting the traditional IRA for those who need an immediate tax break.

are individual IRAs. These are regular retirement investment accounts, either traditional where the money goes in pre-tax, or the Roth style where the money goes in after-tax, but then you never pay taxes on the growth. You can contribute $7,000 a year for both yourself and your spouse for a total of $14,000, but once the year is over, that window does close.
If you want the tax deduction now, use the traditional IRA and contribute to that. If you want the tax deduction later, use the Roth IRA.
Roths are awesome long-term long term, you're gonna make out like a bandit because you're gonna build a huge balance in your Roth account, and you're going to be able to tap that money for retirement and never pay tax on it. So if you can afford Roth, if you can afford to defer the tax benefit until later, I highly recommend it. But if you need the tax break now, go with traditional. Just don't miss out on getting one or the other.