Tips to Planning Your Future IRA Taxes

If you think that you may be facing IRA taxes in the future, then you should consider working now to avoid any problems in the future. When you are ready, begin by identifying your potential tax areas. This will include withdrawals from your IRA and other factors.

Roth IRA Taxes

Roth IRA are not tax-deductible in themselves, however, you may find that you get your distributions tax-free. You will also be able to accumulate your earnings tax-free. If you plan to take out your money before the age of 59, you should be aware that you will face a 10 percent tax penalty.

Traditional IRA Taxes

A traditional IRA requires a specific withdrawal amount once you reach the age of 70. This requirement is known as the RMD. You will need to be able to calculate the amount and must declare the distributions of your pension.

Planning for Being Taxed

Once you know that you are going to be taxed, you can put away money each month to secure yourself against this taxation. Set up a savings account and put in funds to protect your IRA.

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