In this edition of our Motley Fool Conversations series, Fool personal finance expert Dayana Yochim and retirement-planning analyst Dan Caplinger discuss just how complicated taxes have gotten lately. With a whole new set of tax laws to deal with, boosting the amount you save in retirement accounts can pay off more than ever in tax savings.
As Dan notes, most middle-income taxpayers survived the new laws largely unscathed, thanks to permanent reform to the alternative minimum. But for high-income taxpayers, a new 39.6% tax bracket and a 3.8% surtax on investment income make IRAs and 401(k)s even more valuable.
Dayana and Dan go on to discuss various tax-saving strategies, including the pros and cons of converting a retirement account to a Roth account. Moreover, Dan discusses how the continuation of preferential tax treatment for dividend stocks helped investors dodge a potential bullet, as the new tax laws preserve substantial savings on dividend income compared to what you'll pay on bank interest and other types of income.
With all the new complicated tax provisions, it's important for you to get a complete understanding of what you need to know. To get all the answers you need, be sure to check out our Motley Fool ONE Tax Center. Once you enter your email address, you'll get access to our extensive report put together by Fool financial expert Robert Brokamp, which details the newest laws and shows you how you can take advantage of them. With tax season winding down, this limited-time offer won't last long, so click here right now and claim this valuable tax resource today!