In this episode, Jeff discusses:
- What is a SEP?
- How to figure out your net income
- Traditional IRA vs. Roth IRA
Key Takeaways:
- A simplified employee pension (SEP) is an individual retirement account (IRA) that can be established by employers or self-employed individuals. This is easier to set up than solo 401Ks and allows for much higher employer contributions.
- Knowing your net income is always a part of tax planning purposes. To calculate your net income, subtract all the income you make from the business from all the expenses you incur.
- Both Traditional IRA and Roth IRA offer many investment options for retirement, and you should consider them both as you plan for your future. The key difference lies in whether it makes more financial sense to take advantage of tax benefits today or to benefit from tax-free withdrawals in the future.
“Since we know that saving the extra $1,200 on your taxes today is great, you're also just going to spend or waste that money so why even get to save? Instead, I would rather see you invest $5,000 into a Roth, forget about the $1,200 savings this year, and let it grow so you can take it out tax-free in the future." — Jeff Hockett
Connect with Jeff:
Website:https://www.hocketttax.com/
Email: jeff@hocketttax.com
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