Hudson, NH Resident Seeks Guidance
A tax-deferred account offers immediate tax deductions for the full amount of the contribution. Future withdrawals from a tax-deferred account are taxed at your ordinary income rate. Tax-exempt accounts do not offer any tax benefits at the time of contribution. However, any future withdrawals are tax-free including returns on the investment.
A resident in Hudson was looking for the best way to begin saving for retirement. Confused about the difference between tax-deferred and tax-exempt accounts, he sought the advice of Merrimack Tax Associates.