When it comes to tax-free investments, Frisco TX residents may have more choices than they are aware of. Most people know that investing in annuities, an IRA for their retirement, or purchasing municipal bonds are common ways to invest money tax-free, but there’s more to the list of tax-free investments to take advantage of. Financial advisors know of numerous ways you can invest your hard-earned income so you can retain as much of it as possible.
Investing in education is one of the most popular tax-free investments that parents can take advantage of. 24/7 Wall Street points out that not all education savings accounts offer the ability to deduct the contributions you make, but the gains on the accounts remain tax-free until the money is withdrawn. Even then, if the funds are used for education, they’ll remain tax-free.
Uniform Gifts to Minors, also known as UGMAs, are other tax strategies parents and others use to set aside money for college tuition other expenses for children. There’s a bit more flexibility with this option, as the money can be used for more than education as long as it benefits the beneficiary child and a UGMA account isn’t subject to investment restrictions. However, not all of the invested funds are tax-free. According to Forbes, only $1,900/year can be invested in a UGMA and of that amount, only half is tax-free. The other half taxed at the children’s rate–a lower bracket, but still a tax.
Give a Gift
Contributions are tax deductible, but The Motley Fool advises there’s a way to give more and deduct more, too. Gifting stock to a charity or even a family member or another beneficiary allows you to deduct your cost basis–the amount you invested–as well as the amount of the gains, provided you hold onto the stock for a full year. Of course, non-profits won’t pay any taxes on the contribution they receive from you, but family members will be liable for taxes when they sell the stock.
Master Limited Partnerships
Purchasing partnerships that own energy assets are also effective tax-free investments in Frisco TX. They’re called Master Limited Partnerships, and Forbes says the dividends they pay are considered a return of the capital you invested, so they’re nontaxable. True, it’s a plan that has an expiration date, as you’ll only be able to take advantage of it for a couple of decades, but an MLP is still a useful strategy.
Contact Jason Graziani for more information on tax- free investments available in Frisco TX. With extensive experience in retirement planning, protecting assets, and setting financial goals, Jason can help guide you through the confusing maze of saving and investing to protect your family’s future.
Tax free investments Frisco TX
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