Hi there, I'm not a newb to mustachian principles but I'm a newb to actually carrying out some of the financial strategies if that makes sense. I'm looking for advice on how to plan for having a job and which type of IRA to consider. I'm also trying to understand what income taxes look like paycheck to paycheck.
So first what I'm trying to understand is which IRA is better right now. Right now I'm a dependent, and I make money under the table doing yardwork and painting, usually for my big family. From learning from the Mad Fientist and from the suggestions of Jim Collins, a deductible IRA is definitely better in the long run. However, In my college years I'll have a low income, which suggests a Roth will be better. My main question is at what income level do I finally pay income tax? Does the standard deduction apply to me? Or the personal exemption? Also, I will probably make enough under the table this year to have to file taxes, and I'm fine with doing that, but since it'll only be a few grand, won't the deductions just cancel it out? Or since I'm a dependent, those don't apply? I'm just not sure. I kind of need help seeing this demystified.
My final question is about paychecks (I've never had a big boy job, I know, I know.). So what I know is that when you get your wage, taxes are taken out of what you get. Come tax time you see if the government took too little or too much and see if you get any returns. Lets assume I made 10k that year. Standard deduction and personal exemptions hit 10k. Come tax time would all of the money that was taxed be paid back (except FICA tax I believe)? If that's the case, yeah a roth IRA seems better.
Thanks
Edit: Exactly what I wanted to know. I had a feeling the standard deduction would apply (apparently not the personal exemption) that would lower my income tax (not FICA though). Not sure how I'll consider the money I earned because a lot of it was in the family. Thank you guys n gals.