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Author: theCalvin Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121319  
Subject: 3rd Quarter Investment Strategy? Date: 9/27/2004 7:45 PM
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My LLC is doing much better this year and I need advice in investing the profits. I guess what I'm really saying is, what are the best ways to lower my tax liability? I've considered my ROTH IRA, starting a SEP and/or buying an Investment property. I think the limits on the IRA and/or SEP in a single year are around 2000.00- I'd like to understand the options better. I know this is a really broad question but any advice is greatly appreciated.

Thanks in advance!
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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73462 of 121319
Subject: Re: 3rd Quarter Investment Strategy? Date: 9/27/2004 8:02 PM
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I guess what I'm really saying is, what are the best ways to lower my tax liability? I've considered my ROTH IRA, starting a SEP and/or buying an Investment property. I think the limits on the IRA and/or SEP in a single year are around 2000.00-

A Roth won't reduce your current taxes. It just shelters investment earnings from future taxation.

A SEP will reduce your current taxes - contributions to a SEP are tax-deductible. The limit on a SEP contribution is considerably more than $2000. IIRC, it's $41k this year if you have enough income.

Buying rental real estate may or may not reduce your taxes. If your income is over $150k, it definitely won't.

--Peter

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Author: Tiddman Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 73470 of 121319
Subject: Re: 3rd Quarter Investment Strategy? Date: 9/28/2004 10:38 AM
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buying an Investment property

This would be an indirect way of lowering your tax liability. Investment property is really running a small business unto itself...

I think the limits on the IRA and/or SEP in a single year are around 2000.00

The limit on SEP contributions is 25% of your compensation up to $41K in 2004. I was talking about this yesterday...

http://boards.fool.com/Message.asp?mid=21365496

Or read here starting on page 6, "Contribution Limits".

http://www.irs.gov/pub/irs-pdf/p560.pdf

T


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