Biblical Economics 13: Clarity About Roth IRA Taxes

Mark 12:17: “Give back to Caesar what is Caesar’s and to God what is God’s.”

UPDATE: 5:32 – 11/2/22 – Correction: if a person gifts you with several thousand dollars, then it is not taxable, so long as it is under $16,000. When you go to file your taxes, you will just fill out a tax-deductible gift tax form (H&R Block and Inspire Advisors agree). The Merrill representative was wrong: gifts are not supposed to be treated like taxable income.

UPDATE: 12:26 – Correction: when it comes to Roth IRA deposits (contributions), you do NOT need to tax that amount a second time. Remember, the Roth consists of “after-tax” dollars. So, if you’re self-employed like me, just always have the habit of setting aside 20% of your income a year into a checking account and then pay the IRS and the state government your estimated taxes through their websites. Anything you have left over, in your “after-tax dollars,” remaining in your savings account: go right ahead and put that into your Roth IRA with a clean conscience. Look at the money in the Roth IRA like you would another savings account. Once you put the money into the Roth IRA, you should have no tax concerns whatsoever (so long as you don’t try to make withdrawals from it before the age of 59).

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