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Qualified money refers to funds that have specific tax advantages, such as contributions to retirement accounts like 401(k)s or IRAs. Non-qualified money, on the other hand, does not have these tax benefits and is typically subject to regular income tax.

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5mo ago

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What is the difference between qualified and non-qualified funds?

Qualified funds refer to retirement accounts that offer tax advantages, such as 401(k) or IRA accounts, while non-qualified funds are investments made with after-tax money and do not have the same tax benefits.


What is the difference between deductions and contributions?

A deduction on your tax return can be your property taxes or mortgage interest. A contribution is money or property you've donated to a qualified charitable organization.


What is the difference between a qualify annuity and non qualifying annuity?

You mean qualified. It refers to the tax status of the funds inside it. If funds are qualified that is IRS/investment lingo for pre tax money, such as money in a 401K, IRA, or 403b. Non qualified obviously is money that income tax has already been paid on. Taxes in an annuity are defered until you use the money. In a qualified annuity all of the money would be subject to income tax upon withdrawal. In a non qualified annuity only the gains would be taxed. But since it is tax deferred you pay your income tax rate, not capital gains taxes. The original amount invested is not subject to tax when you withdraw it.


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