Taxes on Roth IRA Contributions
Roth IRAs are funded with after tax monies, correct?
Client was told by her tax person, not to fund a Roth because she is paying 25% tax
on her deposit. If she were to fund a Traditional now, then at retirement she would be in a lower bracket.
Am I missing something?
Client could be mis-quoting tax rep or he has kniowledge of rates in 15 years.
Permalink Submitted by mk foss on Thu, 2013-05-09 16:52
My guess is that the individual would have saved 25% of what she contributed to a traditional IRA and get no tax deduction if she did the Roth instead. The rest of the story would be that the tax person thought her tax bracket would be less than 25% during retirement. I think the issue is saving taxes not paying taxes.