March 17, 2010
A TradeKing IRA is a good option if you’re looking to open a Roth IRA or traditional IRA and make contributions for last year. April 15th is the IRA contribution deadline, same as the tax deadline, and contributing to a traditional IRA can lower the taxes you owe for last year.
There are multiple things to consider when deciding between an IRA vs Roth IRA but the contribution deadline for both is coming up; which is why a recent email from TradeKing caught my attention.
TradeKing and Taxes
Trade King is offering a free report on taxes and investing, just give them your email address and they’ll send it to you right away. They also offer their customers free tax reporting software by Scivantage, called MaxIt. The software gives you cost basis information and can help you make investment decisions from a perspective of minimizing your taxes.
Of course your tax investing strategy will differ depending on whether you have a Roth or traditional IRA since you don’t have to pay any taxes on a traditional IRA until you take money out of your account. Regardless of how much income your investments earn or how often you trade within your traditional IRA, the taxes aren’t paid until you make an IRA withdrawal.
A Roth IRA on the other hand doesn’t lower your tax bill in the year you contribute funds since the money is not pre-tax (like a traditional IRA). However, when you make qualified withdrawals from your Roth, you take the money out tax free. One thing to keep in mind is that the Roth IRA rules are changing some this year regarding income limitations and ira conversions.
In addition to keeping taxes from eating into your retirement you also want to keep your expenses low. Since TradeKing is a discount broker they offer low commissions and don’t charge maintenance fees for your IRA account.
Tradeking also allows you to invest in ETF’s, which can lower your expenses, since ETF’s often have lower expense ratios than mutual funds.
All posts by Ben Edwards