With regular IRAs:

- You contribute pre-tax money and thus save on your current taxes by lowering your taxable income
- Your contributions and earnings will be subject to taxation upon withdrawal
- You must begin withdrawing money at age 70½

With Roth IRAs:

- You contribute after-tax money and thus gain no upfront tax-savings benefit. But …
- Your contributions — and earnings — will never be taxed again, so long as you meet the basic guidelines (eligible age of 59½ and held for at least five years)!
- Plus, you never have to make minimum withdrawals, even if you live to be 110.

Both accounts …

- Give you a huge range of investment choices, pretty much everything offered by your broker.
- Can be funded until April 15 of the following year. In other words, you can put money in for 2008 as late as April 15, 2009.
- Allow catch-up provisions for contributors over the age of 50. In 2008, the regular limit for either IRA is $5,000 and $6,000 for age 50+.

Important: You can only contribute to a Roth IRA if your Modified Adjusted Gross Income (MAGI) falls within certain levels. The eligibility for these accounts phases out at certain modified adjusted gross income (MAGI) levels. So there’s no way for some people to know if they’ll qualify until they’ve done their taxes.

Here are the two, major Roth IRA MAGI category limits for the 2008 tax year…

- Single Filing Status: $101,000 or less for maximum contribution. Partial contribution between $101,001 and $115,999. No contribution over $116,000.

- Married Filing Jointly: $159,000 or less for maximum contribution. Partial contribution between $159,001 and $168,999. No contribution over $169,000.
Regular IRAs, on the other hand, have no income restriction for contributions, though the tax deductibility can be affected by MAGI.
There are no age restrictions for Roth IRAs — as long as you have earned income you can start socking away money. Your ability to contribute is also not affected by any retirement plan you might have through your employer. Get the insider scoop on IRAS right now.

To your dividend investing success,

InvestingIndividends

lot of news stories are hitting the wires given all the ups and downs in the market right now. And many of them are citing a term that is often misunderstood – “market breadth.”

Market breadth is a measure of how many companies in a particular index or market have gone up vs. how many have gone down. The majority rule, and breadth is then said to be either positive or negative.

For example, the S&P 500 contains 500 constituents. If 300 of those stocks closed in negative territory on a given day, that market had bad breadth. Conversely, if 400 of the stocks went up, market breadth would be considered very positive.

This measure is viewed as a window into investor sentiment. That’s because it’s a quick way of knowing just how widespread buying or selling was. It’s especially useful when you’re looking at a market-weighted index.

Reason: By design, they attribute higher importance to larger stocks. Thus, losses in larger shares can weigh the entire “market” down, even if the majority of stocks rose! Learn more about Market Breadth and how it can affect your
dividend investing.

To your dividend investing success,

InvestingInDividends.com

According to some estimates, Americans shell out $265 billion every year — more than $900 for every citizen — to comply with the current tax code. That hardly sounds like an efficient system!

The good news is that there’s no reason we have to accept token changes or the status quo. There are at least two other proposed tax systems out there that make a heck of a lot more sense than what we have now.

One alternative is a simple, flat income tax. Steve Forbes and Dick Armey have been two big proponents of this system.

Basically, the approach would mean we all pay a set percentage of our income to the government (17% under Forbes’ plan). The only exception would be a certain initial amount of income — somewhere around $40,000 perhaps, which would allow low earners to keep enough money to cover their basic living costs before taxation.

No doubt, the flat tax proposed by Forbes is not 100% flat. Some credits and exemptions would remain, and the income exclusion would effectively mean we’d still have brackets of some sort. But proponents argue that this system would be far less susceptible to lobbying or other forms of political manipulation. And according to advocates, all it would require is a simple postcard-sized form.

Sound completely ludicrous? Well, it’s worth noting that a handful of U.S. states, such as Pennsylvania, are currently using a flat tax system.

The other major alternative tax system is the idea of a national sales tax, known by its advocates as a “fair tax.” Recently, the idea has been gaining steam in Washington, too.

In one of its most popular incarnations, as espoused by www.fairtax.org, U.S. citizens would pay 23% on all new goods and services for personal consumption. Used goods and business-to-business purchases would be exempted.

This national sales tax would replace federal income taxes, including personal, estate, gift, capital gains, alternative minimum, Social Security, Medicare, self-employment, and corporate taxes.

Wouldn’t that hurt low-income consumers who spend more of their money on life’s necessities? Well, proponents of the fair tax propose a monthly prebate that would ensure all U.S. citizens receive enough money to cover essential goods and services (known as poverty level expenditures).

In terms of numbers, fairtax.org estimates that a couple with two children would receive a family consumption allowance of $20,800 a year, which amounts to an annual rebate of $4,784 or $399 monthly. In other words, it would be assumed that a family of four spends $20,800 a year on necessities and should be excluded from paying a 23% tax on those goods and services.

And so that we don’t end up with a national sales tax PLUS a federal income tax, FairTax advocates are seeking to repeal the 16th Amendment, which allows income taxation, should our country adopt their plan.

As with the flat tax system, some states already have this basic “fair tax” arrangement right now. Florida is a good example. Residents don’t have to bother filling out state income tax forms at all! Learn more about dividend investing and other tax system alternatives.

To your dividend investing success,

InvestingInDividends.com

The China Securities Regulatory Commission — Beijing’s equivalent of the U.S. Securities and Exchange Commission — is pressing the country’s listed companies to adopt more generous dividend policies.

Previously, China-listed companies that wanted to issue additional stock had to pay out at least 20% of their annual average profit for the past three consecutive years in the form of shareholder dividends (cash or stock).

The CSRC wants to raise the minimum amount to at least 30% of profits to shareholders. If a company refuses to comply, it will be punished by not being able to float new bonds or sell additional shares.

According to the Chinese agency:

“Giving fair returns to shareholders is part of listed firms’ responsibilities and is the foundation of stable and healthy development of the securities market.”

Listed companies will also have to include information on their cash dividend policies and previous cash dividend data in their annual reports.

If they don’t declare cash dividends? Well, they’ll have to tell investors why, along with what they plan on doing with their retained earnings!

What do we think of the plan? We love it!

Read all about China’s talks to dividend stock companies to implement generous dividend policies in China.

To your dividend investing success,

InvestingInDividends.com

This past Friday, consumers in ten Latin American countries were lining up to get Apple iPhones.

That’s right … the most coveted cellphone in the world is now available in Argentina, Chile, Colombia, Ecuador, El Salvador, Guatemala, Honduras, Paraguay, Peru and Uruguay.

And for the company that’s bringing the device to the region — America Movil — it looks like another coup. Already, the company has been expanding its footprint through acquisitions, and now it is clearly the carrier with the most cachet in its operating area.

Its stock pays a dividend, too. Although it provided just a token payment from 2000 through 2004, AMX has been making more substantial distributions lately. Particularly through special dividends.

To read more about America Moviol dividend payouts today!

To your dividend investing success,

InvestingInDividends.com