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Save with Tax-Advantaged Products**

You probably know that contributions to an IRA may be tax-deductible. But did you know that contributions to your IRA through April 15, 2007 can be applied to your 2006 tax return? In addition, you can enjoy savings year-round with many other tax-advantaged products.

Reduce Your Taxable Income
  • Traditional IRA—Contributions to a Traditional Individual Retirement Account (IRA) may be tax-deductible ($4,000 maximum annual contribution). If you made $40,000 for the year and contributed $2,500 to your Traditional IRA, your taxable income would drop to $37,500. Keep in mind, when you begin distributions upon retirement, your contributions and earnings will be taxed.**
  • 403(b) / 457(b)—Available to school employees, both 403(b) Tax-Sheltered Accounts and 457(b) Deferred Compensation Plans let you invest your pre-tax, payroll-deducted contributions into various investment options ($15,500 maximum annual contribution per plan). You do not have to pay income tax on the amounts you contribute, or on any subsequent dividends earned, until the funds are withdrawn upon retirement, when you will most likely be in a lower tax bracket.**
Enjoy Tax-Deferred Savings
  • Roth IRA—Although Roth IRA contributions are not tax-deductible, all contributions and earnings left in the Roth IRA for at least five years and withdrawn after age 59½ will not be taxed ($4,000 maximum annual contribution).**
  • Coverdell Education Savings Plan—Contributions are made with after-tax dollars, but withdrawals of contributions and earnings may be tax-free if used for qualified education expenses ($2,000 maximum annual contribution).**
  • 529 Plan***—Contributions to this government college savings plan are made after-tax; however, it offers potential tax-deferred growth and tax-free withdrawals on qualified expenses as well as high annual contribution limits—up to $300,000 for some state plans.**
Interest-Deductible Loans****
*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with SchoolsFirst Federal Credit Union to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution.

CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.
** Please consult your tax advisor to determine if any tax benefits apply to your particular circumstances. The credit union does not make any promises, nor does it give any guarantees, as to the aforementioned tax savings.
*** Tax provisions allowing for federal income tax-free withdrawals for qualified expenses expire 12/31/2010 unless extended by Congress. State tax laws and treatment will vary. If your state offers a plan, you may want to consider what, if any, potential state income tax benefits it may offer. There are additional fees associated with 529 savings plans. Investments in 529s involve investment risks. You should consider your financial needs, goals and risk tolerance prior to investing.
**** Please consult your tax advisor to determine whether the interest will be tax-deductible in your particular circumstances. The credit union does not make any promises, nor does it give any guarantees, as to the tax-deductibility of interest paid.

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