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The Trump account went live on July 4th
But before you fund one
Here's how it really compares to a 529, UTMA, or Roth IRA:
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“What’s the difference between a tax deduction and a tax credit?”
Most people use the two interchangeably
But one of them is worth about 3x the other
Here’s deductions vs credits explained: 🧵
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So which should I be chasing?
Credits:
- worth more per dollar
- but most are gone at your income
- and you can't really create one
Deductions:
- only worth your tax rate
- but you control them
For high income it's the pretax accounts: 401k, HSA, and that's mostly it
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Summary:
1. A deduction lowers your taxable income
2. A credit comes off your bill
3. A deduction is only worth your tax rate
4. Most credits phase out at $200,000
5. The 401k and HSA skip itemizing
Find this helpful? Follow @clbradfish for more like this everyday!
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There’s a 0% long term capital gains bracket
Most people don’t know it exists
For 2026, here are the 0% brackets:
Single: under $49,450
Married: under $98,900
That’s taxable income (which is after your standard deduction)
Which is why a gap between jobs is one of the best times to sell appreciated stock
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“I make too much for a Roth IRA”
Only partially true
You make too much to contribute to it DIRECTLY
Here’s the workaround for high income earners: 🧵
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"So should I actually do this?"
Yes if:
- you're over the income limit
- you have close to $0 in traditional, SEP, and SIMPLE IRAs
Not yet if:
- you have a large rollover IRA and your 401k won't take it back in
- you don't want to contribute to a Roth IRA this year anyway
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Quick Summary:
1. The limit blocks contributions (not conversions)
2. Contribute traditional, convert to Roth
3. Pro rata counts every traditional, SEP, and SIMPLE IRA
4. Roll IRAs to your 401k by Dec 31
5. File Form 8606
Find this helpful? Follow @clbradfish for more like this everyday!
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