Options Trading Tutorial

What options do I have for putting my stock earnings into a tax free account?

I am a U.S. citizen working overseas and I take the Foreign Earned Income Exclusion. This leaves me with $0 taxable income. However, I would like to put my stock earnings into a tax free account. I have been told that I cannot put the money into an IRA. Are there any other options? My total stock earnings will not be more than $5000 in any given year.

Public Comments

1. Consider a tax free municipal bond mutual fund or a tax free money market fund or tax free municipal bonds in a school or community that you know back home. Caution: Mutual Bond Fund prices do fluctuate. Your principle is NOT guaranteed.
2. Your stock earnings are fully taxable. They are not eligible earned income to contribute to an IRA or other tax preferential account. (Even if it was, you'd still have to pay tax on the earnings first.)
3. If you have stock in a taxable account, any gain is taxable. You could establish a Health Savings Account if you have a high deductible health insurance policy. This will allow you to deduct your contribution (which depends on your policy deductible) and not pay tax on distributions for health care. Municipal bonds and an after-tax annuity will also be tax advantaged.