Here's how it works: Say you receive a car, RV or boat loan through a credit union with which you also have a credit card. In the fine print of the loan contract, you'll probably see that your credit card balance is secured by the auto, RV or boat.ere's how it works: Say you receive a car, RV or boat loan through a credit union with which you also have a credit card. In the fine print of the loan contract, you'll probably see that your credit card balance is secured by the auto, RV or boat.
If you've made nondeductible contributions to your traditional IRA, you have to use Form 8606 to figure the taxable and nontaxable portion. Otherwise, the entire amount is taxable. In addition, if you take a taxable non-qualified withdrawal, you'll have to figure the 10 percent additional tax with Form 5329.
(In a simplified example, if you earn $50,000 and contribute $5,000, your taxable income drops to $45,000.) With a Roth IRA, you contribute post-tax dollars, so your immediate taxes are unchanged. The money grows untaxed in your account until withdrawn in your retirement years. At that point, if you've followed the rules, it's withdrawn tax-free. That can be a big deal if you've saved a lot of money and have invested it effectively.