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Tax Benefits of Gold IRA Explained

Tax Benefits of Gold IRA Explained

Deciding what to do with your retirement money and how to save for retirement is a big decision. You may have come across Gold IRAs as an option. There are many benefits to investing in a Gold IRA, including some great tax benefits. Keep reading to learn more about the tax benefits of having a Gold IRA and what it means for you when it is time to finally kick your feet up and retire.

Tax Benefits of Gold IRA #1: Tax Deferment

A Gold IRA allows you to keep your physical gold in an IRS-approved depository. One of these benefits is tax deferment. This means that you do not pay taxes on your gold until later, when you are ready to retire and withdraw your money.

If you choose a Gold Roth IRA, you will not be taxed at all on your gold. That means that withdrawals will come tax-free once it is time to retire, however, Gold IRAs yield better overall returns. Many choose to put some of their money in both in order to diversify and hedge against inflation of the traditional dollar.

Retirement Savings Contributions Credit

Are you saving for retirement? You get to take advantage of the Retirement Savings Contributions Credit, also known as the Saver’s Credit. According to the IRS, all you need to do is meet these requirements:

You’re eligible for the credit if you’re:

  • Age 18 or older,
  • Not claimed as a dependent on another person’s return, and
  • Not a student.

You were a student if during any part of 5 calendar months of the tax year you:

  • Were enrolled as a full-time student at a school, or
  • Took a full-time, on-farm training course given by a school or a state, county, or local government agency.
  • A school includes technical, trade, and mechanical schools. It does not include on-the-job training courses, correspondence schools, or schools offering courses only through the Internet.

The amount of your credit can be calculated by the following:

Depending on your adjusted gross income reported on your Form 1040 series return, the amount of the credit is 50%, 20% or 10% of:

  • contributions you make to a traditional or Roth IRA,
  • elective salary deferral contributions to a 401(k), 403(b), governmental 457(b), SARSEP, or SIMPLE plan,
  • voluntary after-tax employee contributions made to a qualified retirement plan (including the federal Thrift Savings Plan) or 403(b) plan,
  • contributions to a 501(c)(18)(D) plan, or
  • contributions made to an ABLE account for which you are the designated beneficiary (beginning in 2018).

The maximum contribution amount that may qualify for the credit is $2,000 ($4,000 if married filing jointly), making the maximum credit $1,000 ($2,000 if married filing jointly).

Higher After-Tax Returns

If you expect to pay a lower tax rate after retirement, Gold IRAs are the way to go. You can look forward to the aforementioned tax deferment, which allows for higher after-tax returns. An after-tax return is any profit made on an investment after subtracting the amount due for taxes. Many businesses and high-income investors will use the after-tax return to determine their earnings. When it comes to retirement, however, it means more money in your pocket rather than Uncle Sam’s.

Tax Amount Depends on Your Income

After you clean up the confetti from your retirement party and it is time to start taking withdrawals and pay Uncle Sam, your tax amount will depend on your income — not on the value of the gold you have in the bank. The amount withdrawn from the IRA is added to your gross income and taxed, however, if your investments generate losses, you will not be able to deduct those losses on your tax filing.

While it is tempting for some to spend as much time as they can saving their gold and not withdrawing until they absolutely need to, don’t wait too long to retire. You must start taking distributions from the IRA by the age of 70 ½.

About Priority Gold

Investing in a Gold IRA is just one of the many ways you can set yourself up for retirement. You can roll your current IRA into a Gold IRA, open up an additional IRA, or all of the above. It can be hard to decide what to do, but we are experts and here to help you. If you are ready to invest in gold to protect your savings and secure your future, give us a call.

Priority Gold is one of the most trusted precious metals dealers in the United States with BBB A+ Rating, AAA Rating with Business Consumer Alliance, and 5 Stars Rating with TrustLink. We specialize in providing precious metals investment services with Security, Liability, and Great Convenience for customers.

Our team is committed to helping to streamline their precious metals purchases at a fair price, selecting the right precious metals portfolios, and meeting their important financial objectives. We offer Free Storage for qualifying Gold & Silver IRA accounts, a fast & easy gold buying process, and smooth IRA Transfer. And gold shows up on schedule. Priority Gold guarantees the highest standards of customer service, which comes with honesty, professional conduct, and the Ethical Code of Business.

For more information, visit us at

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