The Tax Resources Blog

Archive for July, 2010

Retirement Tax Havens

Question: Retirement fund cap in California?

I live in California and I’d like to put in money into a retirement fund, 401(b) for teachers, but I don’t want to get taxed on it. I have money saved, but haven’t started a retirement as of yet. I want to put in a large sum of money. How much can I put into my retirement without being taxed by the government?

Answer: You can’t put a lump sum into a 401(b) plan. The only way the IRS allows you to fund it (other than a transfer from another IRS approved retirement plan) is to have the money taken out (before taxes) of pay check by your employer.

Tax Havens