12

If you have the option of a high deductible health plan you might consider using a High deductible plan with a Health Savings Account (HSA) in the years before the first child is born. You can contribute the maximum into the HSA but don't use the money. You may decide that in the year the child is born to pick a non-high deductible plan, but because the ...


11

You can use a Roth IRA for retirement and you can still withdraw all of your contributions at any time. You can also withdraw $10,000 worth of the earnings in your Roth IRA for a first-time home purchase. You can also withdraw for unreimbursed medical expenses and qualified education expenses. Full details are available in IRS publication 590. There is a ...


11

There aren't any. Of these significant, relatively predictable expenses I would not necessarily classify child birth cost as either significant or predictable. Depending on your health insurance a healthy baby birth will cost very little out of pocket. Even with crummy insurance, many children can be birthed for less than $1,000. Often prenatal ...


6

The alternative isn't too bad. Invest in a regular account. The dividends and cap gains will see favorable tax treatment. In my opinion, much of the magic of the retirement account is with 401(k) matched deposits. The benefit you'll miss is the long term opportunity to skim income off the top, at say, 25%, have it grow, and then withdraw it at a much lower ...


5

There are some truths and some half-truths here, and obviously some misunderstandings. people claim that if you save 75% of your income into tax deferred retirement accounts, you wind up paying no income tax even with an income like $100k, since you would only have $25k of taxable income. Well, that's nice, but what are you going to live on? $25K/...


4

I'm not a 'rule of thumb' guy, but here, I'd suggest that if you can set aside 10% of your income each year for college, that would be great. That turns out to be $900/mo. In 15 years, if you saw an 8% CAGR, you'd have $311K which happens to be in your range of expenses. And you'd still have time to go as the baby won't graduate for 22(?) years. (Yup, 10% ...


4

A TFSA is a tax free savings account. It is a type of account where you can buy various investments like stocks, bonds, or funds (mutual, exchange traded, and money market). There are some other options but it's best to see what your bank or broker will allow. You probably specified the type of investment when you opened the account. You can look at your ...


4

Just the principal contribution counts towards the limit. In your example, if you contribute 30,000 and you earn 20,000, only the 30,000 counts. To find out exactly how much room you have, you can log into CRA's MyAccount and it will tell you: http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/myccnt/menu-eng.html


4

No, that's not what it's saying. It's saying you can put £100 into a 3% account in, say, May and earn 3% taxable* for most of the year and then put it into an ISA at the start of the following year just before your ISA allowance would otherwise be lost. This gets you the higher interest for (nearly) a year whilst still building up savings that will be tax ...


3

It's difficult (impossible?) to properly answer this question without knowing more about what kind of account it is. Based on "tax free" I'd have guessed a JISA (Junior ISA) or a Child Trust Fund but I'm not sure that can fit with the "two signatories" one of whom is a grandparent. Or is it not actually tax free but just a regular savings account paying ...


3

Yes, there are some real dangers in having your money locked into an investment. Those dangers are well worth thinking about and planning for. Where you are going off the rails is acting like those are the only dangers to your money, and perhaps having an exaggerated idea of the size of the dangers. It is an excellent idea to keep an emergency fund with a ...


3

The primary tax-sheltered investing vehicles in Canada include: The RRSP. You can contribute up to 18% of your prior year's earned income, up to a limit ($24,930 in 2015, plus past unused contribution allowance) and receive an income tax deduction for your contributions. In an RRSP, investments grow on a tax-deferred basis. No tax is due until you begin ...


3

The "risk", other than losing principal (especially when rates go up) is capital gains. As with any mutual fund, this one might need to sell assets for cashflow. In which case the taxes on the sales are shifted to the investors. So you may end up with the fund losing value due to price fluctuations, yet you'll have capital gains (probably with a significant ...


3

You should talk to a US & Canadian tax advisers of course, but to the best of my understanding RRSP's are treated the same in the US and Canada. You have to file form 8891 with the IRS to get that treatment. I'd suggest getting a professional to explain about it.


3

I'm not sure about the first part of your question. To make matters worse, if you have access to a 401(k) and your income is relatively high, you won't be able to deduct your IRA contribution. I'm very skeptical you could avoid all income tax on a $100k income. As to the second part of your question, according to this post, if you can save 75% of your take-...


3

As to where the interest comes from: The same place it comes from in other kinds of savings accounts. The bank takes the money you deposit and invests it elsewhere, traditionally by lending it out to others (hence the concept of a "savings and loan" bank). They make a profit as long as the interest they give for "borrowing" from you, plus the cost of ...


2

There was so much opposition by both parties that the proposal is dead. But yeah, the major benefit was going to get taxed, although not necessarily at the same brackets or rates. Year-to-year growth would still have been tax-deferred, so still a benefit.


2

You are not required to contribute to a TFSA or an RRSP. Nobody contributes to OAS, it's a program to provide benefits to old people for them to be "secure". The only fund you MAY contribute to is CPP. If you're being paid a salary by a Canadian employer they will deduct some money from your salary (and add more money of their own) as CPP contributions. ...


2

Assuming India; PF is mandatory for basic salary of less than 6500/- and optional for people with salaries above Rs 6500/-. Quite a few companies give the option of opting in or out of the PF scheme to individuals. he employer contribution and employee contribution to PF has to be paid myself. Is this right ? What does it mean ? It will be deducted ...


2

Fundamental rule of investing money : High Risk High Return Low Risk Low return Now come to the point, best money investment Public Provident Fund : It is the safest and secure long-term investment product amongst the best investment options in India. It is totally tax-free. Under the PPF account opened in bank or post office the money get locked for the ...


2

As far as I read in many articles, all earnings (capital gains and dividends) from Canadian stocks will be always tax-free. Right? There's no withholding tax, ie. a $100 dividend means you get $100. There's no withholding for capital gains in shares for anybody. You will still have to pay taxes on the amounts, but that's only due at tax time and it ...


2

Those advantages you've described (tax treatment and employee match) are what you receive in exchange for "locking up" the money. Ultimately it's a personal choice of whether that tradeoff makes sense for you situation (I'll echo the response that the real answer to your question is planning). Roth options (either 401K or IRA) may be good compromises for you,...


1

You heard correctly that interest paid on NRE accounts in India is not taxable income in India. In particular, there is no Tax Deducted at Source (TDS) by your bank and sent to the Indian Income Tax Authority on your behalf, and you don't need to file any tax returns in India. But, if you are a tax resident of the US (different from visa status), your world-...


1

so easily 20 lakh could be deposited, if it was tax free. You have to pay taxes and then gift. Any income generated will be taxed in the hands of grandparents. So if you get a salary of 20 lacs, you pay taxes on 20 lacs, say approx. 5 lacs. From the remaining 15 lacs, say you gifted your grandparents. If your grandparents invest this and generate an ...


1

While it’s your personal choice on HOW you save for later its essential that you save. My sister works in a bank and recommended me not to put any money into retirement plans since the tax-advances seem fine but have to paid back when you take the money out of the accounts (in Switzerland, don't know about the united states). Many reasons exist that you ...


1

In India, usually the employer states the employer contribution and employee contribution is part of CTC. This is just to artificially inflate CTC amount. So, ideally both the amounts will be deducted. You have 2 choices. Opt for PF or Opt out. If you Opt, both the the amounts will be deducted. IF you Opt out, You will get both the amount in your salary. In ...


1

Best way to invest around 50k Indian rupees and save Tax There is nothing "Best". There are multiple options that are available under 80C and you need to select one that suites you best. There are market linked options like ELSS, or assured returns like 6 years FD, or PPF or Term Insurance or other such options.


1

Why your partner's employer has decided to wait until he has crossed the threshold then tax him I have no idea. This makes no sense to me since it could leave you very short for the months he didn't pay any and is paying extra to make up the missing tax. The idea is that you pay a little each month based on your projected earnings throughout the tax year. ...


1

Apart from PPF, there are no investment that offer EEE. Of course EPF offered by employers also offers same.


1

No, it is not the only advantage. Contribution to the 529 plan is considered a gift to the beneficiary for gift tax purposes. However, you can contribute 5 times the maximum exemption amount at once and "spread" it over the next 5 years for the purpose of gift tax exemption. See the instructions to form 709 for details. That is very useful in estate ...


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