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IRA Plans

Tax-advantaged retirement savings plans including the traditional IRA, Roth IRA, SEP IRA, SIMPLE IRA, and self-directed IRA

500 Questions

Can you borrow from an IRA without penalty?

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Asked by WriteClub

No. You cannot borrow from an IRA period.

(You may borrow from some 401k plans, w/o penalty).

When was RMD Kwikform created?

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Asked by Wiki User

RMD Kwikform, a global provider of formwork and shoring solutions, was created in 1948.

What does SEP IRA stand for?

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Asked by Wiki User

SEP IRA stand for Simplified Employee Pension Individual Retirement Account. They are frequently used by small business owners to provide retirement benefits for themselves and their employees.

Do you need earned income to contribute to a Roth IRA?

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Asked by Wiki User

You must have earned income for the year in question, equal to or above the amount to be contributed for that year.

However, the actual source of the income does not have to be the earned income itself.

For example, it could be part of an inheritance or from capitol gains.

If you use a Tax Preparation Program, such as Turbo Tax, the program has a module that will calculate whether or not you qualify to contribute to a Roth or Traditional IRA in any given year, as well as the maximum you may contribute. This calculation takes place as part of the "Final Audit" phase at the end of the process.

Turbo Tax also compares a Roth contribution vs. a Traditional IRA contribution for the year, based on your individual situation based on the information you input while preparing your return.

Are there any advantages of a self directed Roth IRA?

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Asked by Wiki User

One advantage of a self directed Roth IRA is that you will be allowed to hold investments that are not typically in a retirement investment such as investment real estate or a franchise business.

What is a self directed IRA and how is it different from a traditional IRA What about the tax benefits Can anyone help?

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Asked by Jaxonmarkell

In a traditional IRA you money is held by a custodian. You investment choices are limited to those that the custodians allow you to.

Self directed IRA's allow you more investment choices. You still need the

custodian, but they allow you more investment choices. You request a check for a specific investment like real estate and they'll send you a check.

Then there are those that give you full control of your money and give you check writing privileges, like the broad financial Ultimate IRA. You don't need to make any request from custodians, you simply write a check.

There are some prohibited transactions, like investing in collectors items.

www.broadfinancial.com/ira_faq.html

What is a self directed IRA and where can you get one?

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Asked by Wiki User

Any brokerage agency can help you set that up.



While any brokerage can set up a self directed IRA, it depends on what you intend to invest the IRA in. Specifically, if you wanted to invest in real estate, mortgages, tax liens or practically anything but life insurance and collectibles. Then you will need to find a custodian that allows those investments.

There are several custodians that permit such investments and its really quite easy to set up. I have used Entrust and Guidant on several occasions.

What exactly is an IRA rollover?

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Asked by Wiki User

A rollover is when you transfer you're plan into another investment such as real estate or a stock/ investment fund where you are not taxed since it is just being placed in a similar type investment.

Can you roll a traditional IRA into a simple IRA?

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Asked by Wiki User

A Savings Incentive Match Plan for Employees individual retirement account, or SIMPLE IRA, allows small business owners to set up a retirement plan for employees without the paperwork involved in establishing a 401k plan. It's possible to make contributions to a SIMPLE IRA, traditional IRA and a Roth IRA at the same time, although it's not always wise to do so.

Can you contest a beneficiary of an IRA account?

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Asked by Wiki User

The legal system generally will allow you to contest anything you like. However, you chances of changing a designated beneficiary on someone else's IRA are slim. If you decide to contest a beneficiary, recommend you contact an attorney for advice.

Can an individual contribute to an IRA and another retirement plan at the same time?

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Asked by Wiki User

Absolutely - both a traditional IRA and a Roth IRA are simply labels on top of a standard investment account. They enforce rules about how the investments in the accounts are handled as far as taxes, distributions, withdrawals, etc. but there's nothing that precludes you from having one of each or several of each (except the headaches associated with keeping a handle on all those accounts).

Who qualifies for IRA?

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Asked by Wiki User

You can set up and make contributions to a traditional IRA if:

  • You (or, if you file a joint return, your spouse) received taxable compensation during the year, and
  • You were not age 70½ by the end of the year.

You can have a traditional IRA whether or not you are covered by any other retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer retirement plan.

Can you trade on margin and short stocks in your self directed IRA?

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Asked by Wiki User

According to IRA regulations, if any part of an IRA is used as collateral, the entire IRA is considered to be distributed. Distribution of such accounts are subject to income taxes and an additional penalties. This is important because margin accounts require that you pledge your account as collateral. Your attempt to convert an IRA account into a margin account will nullify it's "qualified" status. It is for this reason that investment firms will not provide margin for a retirement account. Also, because shorting stocks requires the use of a margin account you can not invest in this way either. If you wish to short stock you must open a standard margin account that is not a qualified retirement account.

What are the penalties for withdrawing early from an IRA?

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Asked by Wiki User

You can withdraw (also called "distribute") money from your IRA penalty-free after you reach age 59 and a half. At that time, you will owe ordinary income tax on monies distributed from a Traditional or Rollover IRA. Monies distributed from a Roth IRA are income tax free, because you paid income tax on the contribution to the Roth IRA in the year it was earned.

Funds distributed from any type of IRA before you reach age 59 and a half are subject to a 10% penalty, plus funds distributed from a Traditional or Rollover IRA are always subject to ordinary income tax treatment.

Exceptions to this rule include distributions for things like qualified medical expenses (subject to an income threshold), purchasing your first home, and in the event that you have become disabled. I recommend strongly that you review the IRS website for current rules about distributions and exceptions to the penalty.

http://www.irs.gov/publications/p590/ch01.html

You might also consult with a tax preparer.

Another thing to note is that you can distribute contributions from your Roth IRA without paying a penalty or income tax, since you have already paid income tax on that money. If you distribute earnings (amounts you have earned by investing) from a Roth, you will owe the 10% penalty.

Do you need spousal consent to name another beneficiary on your IRA?

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Asked by Wiki User

Yes, the beneficiary of an inherited IRA (AKA beneficiary IRA) can name a beneficiary to that account. In the past, this was not really allowed so some form may still practice as such.

What is the youngest age to open an IRA?

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Asked by Wiki User

IRA account can be opened at any age as long as the person/kid has earned income.

How old do you have to be to take money out of an IRA with no penalty?

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Asked by Wiki User

You can begin taking money out of a traditional IRA without penalty at age 59.5. You can withdraw the principal from a Roth IRA at any time, because you already paid tax on the value of your contributions.

Can you use your VA disability compensation to qualify for a Roth IRA?

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Asked by Wiki User

You qualify for a Roth IRA if you have qualifying income. Being disabled is not the factor that determines eligibility. You need to speak with a tax professional to determine if your income qualifies you for a Roth account. You can read more about Roth IRA accounts at the link provided below.

Is there a maximum withdrawal for an IRA?

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Asked by Wiki User

No, You are not required to withdraw any money from an IRA until you are 70 1/2 (RMD)- this doesn't apply to the Roth. The RMD is cal, of the amount of money you have in all your non-Roth account dividend by an age factor depend on who and how old your bene of the acoutn is. See pub 590 for the 3 different RMD charts.

No, there is no maximum. You can take it all out after 70 1/2, but if you're prior to that age I say check with the IRS, especially for penalties.

Can you roll over 457 into a roth IRA?

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Asked by Wiki User

Yes, if the Roth is being transferred from one firm to another, then it is just a transfer. Simply request an account transfer form from the receiving institution, fill it out, and submit with a copy of a recent statement. If this is happen from Roth IRA to Roth IRA within the same firm, then this is just consider a consolidation. Neither of the above mentioned scenarios would result in any tax consequences/penalties.