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Are you financially fit?

In 3 minutes you’ll know if you have some financial workouts to do.

Take the 3-question quiz, find out if you’re correct, and then learn how to use these money rules in your daily life.

How late can you contribute to your tax advantage accounts?

Answer: C

“April 15, 2024 (Tax Day)

You are able to contribute to your tax advantage accounts until April 15, 2024 which is tax day. If you are filling out your taxes and you plan to contribute to these accounts after you file your taxes, make sure to note on your return how much you intend to contribute to that account by the time April 15th rolls around.

Capital Losses

Answer: B

“$3,000”

It is worth noting that your capital gains tax is calculated on your net gains from all investments. So, if your gains outweigh your losses, then you are subject to capital gains tax. If your losses outweigh your gains, however, you can use that to reduce your taxable income. You can use up to $3,000 in losses per year to subtract from your taxable income. Any further losses can be carried into subsequent years to offset your taxable income up to $3,000.

What accounts do not reduce your AGI

Answer: C & E

“Roth IRA & 529”

The Roth IRA and 529 Educational Accounts are both funded with after-tax dollars. Here’s a chart breaking down the difference between a Roth IRA and a Traditional IRA.

Here’s some info on 529 Accounts

529 plan

A 529 plan is a plan that allows you to contribute up to $16,000 in after-tax dollars towards education. All withdrawals from the 529 plan are free from federal income tax as long as they are used for qualified education expenses.

Money in a 529 college savings plan that the student or the parent owns is reported as a parent asset on the FAFSA, and distributions are ignored.

If you have the means to do so, each parent, guardian, or family member can contribute five years of gifts upfront for each child without being subject to the gift tax.

This means you, your parents, or any other family member could contribute $80,000 each towards your children's education fund while they are still young and let that money grow to cover their education expenses. This process can be a bit complicated, so please refer to professional tax advisors for more details about the process.

Your state may also offer additional tax benefits such as tax credits or deductions for 529 plan contributions.