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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
886 Questions
What is the penalty for withdrawing early?
Early withdrawal penalty of 10% on the taxable amount of the early withdrawal distribution amount when you are under the age of 59 1/2.
Unless you meet one of the exceptions to the early withdrawal penalty amount.
Should you convert your traditional IRA to a Roth?
Depends mostly on whether your marginal tax rates will rise or fall. Starting with $1,000 untaxed money:
The Roth route: pay income tax on it at say 28%. The remaining $720 goes into the Roth. Say it doubles over X years to $1,440. You draw it out but do NOT pay tax on it. You get $1,440 after tax money.
The traditional IRA/401(k) route: do not pay tax on it; $1,000 goes into the traditional IRA/401(k). It doubles over the same X years to $2,000. You draw it out but you DO pay 28% tax on it. You get $1,440 after tax money.
The R stands for Retirement. IRA means Individual Retirement Account (or Individual Retirement Arrangement).
Assumning you are in the same tax year or have not yet filed your tax return for the tax year in which you made the IRA contribution, yes.
From IRS Pub. 590 (2008), Individual Retirement Arrangements, adjusted to reflect 2009 tax year dates:
If you made IRA contributions in 2009, you can withdraw them tax free by the due date of your return (April 15, 2010.) If you extend your 2009 return, you can withdraw them tax free by the extended due date (October 15, 2010.) You can do this if, for each contribution you withdraw, both of the following conditions apply.
You did not take a deduction for the contribution.
You withdraw any interest or other income earned on the contribution. You can take into account any loss on the contribution while it was in the IRA when calculating the amount that must be withdrawn. If there was a loss, the net income earned on the contribution may be a negative amount.
In most cases, the net income you must withdraw is determined by the IRA trustee or custodian.
See the attached links for more info.
THE GUARDIAN IS NOT ALLOWED TO TAKE THE MONEY OUT TO USE FOR THEMSELF. oNCE THE MONEY IS IN THE GUARDIAN/COVERDE
LL ACCOUNT, THEN THE MONEY IS THE KIDS.
I have a SEP at TD Ameritrade and am very happy with the ease at which I can buy/sell securities. I don't recall any fees required to open it (but it was 12 years ago, I may have forgot) and the only fees I have are broker fees for buying/selling ($9.99 per trade).
Early withdraw of money from a traditional IRA before you reach the age of 59.5 is subjected to the 10% penalty and is treated as normal income for the year that you receive the withdraw. IRA distributions are subject to current taxes even in retirement. The benefit comes in that the money grew tax free and you will most likely be in a lower tax bracket during retirement than you were while working full time.
The IRA status is more significant than a CD Rollover status. The Beneficiary can transfer her deceased Mother's IRA into an IRA of her own whether the daughter has an existing IRA in her own name OR opens a new one in her own name. And she will owe no inheritance/estate tax doing so. But she must do this within 60 days from the date that the IRA passes to her as Beneficiary. The money must pass untouched (used) from the name of the Mother to the name of the Daughter, and the Fed allows a 60-day grace period for this to take place in order to maintain the non-taxable IRA status of the money. This is not a CD Rollover. It is an IRA Transfer. This would apply whether the Mother had her IRA money in mutual funds, CD or simple interest-bearing account. There would be no penalties, if the very simple IRA guidelines are followed.
Is a roth IRA a potentially tax free account?
Nothing is tax free. On a Roth IRA you pay the tax on the money the year you put it into the IRA. You are supposed to be able to withdraw it from the IRA without paying tax on it. In a regular IRA you put the money into an IRA and do not pay tax on it when you put it in. You pay the tax on it when you withdraw it. The idea behind the regular IRA is that you will pay taxes in old age when your income is down. The idea behind the Roth is that the government can get money from you now. You have to decide which you think is better in your particular situation.
Can you have both a regular IRA and a roth IRA?
Provided you meet the compensation requirements and the income limitations for each type of IRA, you may contribute to both a Roth and a regular IRA. However, the combined amount may never exceed $5,000 (or $6,000 if you are 50 or older). Therefore, should a 45-year old be eligible and choose to contribute $3,500 to his Roth IRA, the most he could contribute to a regular IRA for the same tax year is $1,500.
How much can you put into an IRA?
It depends on the type you choose.
Traditional IRA : The maximum amount in Tradtional IRA is $2000. From the year 2000-2008 it went up to $5000. For the year 2009 based on the inflation rates, the restrictions would be modified. For now, the contribution that a person makes is deducted from tax. The amount will be calculated on the basis of the Adjusted Gross Income or AGI.
Education IRA : The maximum amount in Educaton IRA is usually $500 which is on annual basis and is tax free when the cash keeps growing. There is treatement given when the beneficiary wants to use it for education related costs.
Roth IRA : Roth IRA is not deductible. There is a plus point when comes to Roth IRA i.e its tax free when it's distributed. The buildup is also tax free. Your djusted Gross Income should be below $95000 for individual and $150000 for married couples. The rule here is, it cannot be withdrawed for the first five years.
For more info, please refer the link in sources. Happy to help you.
Can you pledge a Roth IRA as collateral?
You cannot use your roth IRA as colleteral. The pledge will result in a "constructive distribution" of the amount pledged, and the earnings component of the amount pledged will be taxable to you at the time of the pledge.
Is Asher Roth related to JD Roth?
Asher Roth is not related to Wired magazine journalist Daniel Roth, as far as one can tell from reading his articles. There is very little rhyming.
Contribution of Pedro B Escuro?
Pedro B. Escuro graduated with a Bachelor of Science degree in Agronomy, then he obtained an M.S. in Plant Breeding at Cornell University in New York. He went back to the Philippines and improved eight varieties of rice, as well as three varieties of wheat.
Can you take your IRA account and transfer that IRA account into another individuals IRA account?
No, you can not transfer an IRA account from one person to another. IRA accounts are only for one particular individual. You would have to take a distribution from your IRA account and deal with any tax consequences, then give that money to the other individual so that they could contribute it to their IRA account. They would have to abide by the limitations placed on contribution limits i.e. $5,000 per year (as of 2009) for individuals under the age of 50 and $6,000 (called a catch up contribution) for those over the age of 50.
The law does not set a waiting period. But depending on what you invested in and the policies of your IRA custodian, it may take some time to get your money. For example, the custodian could require a waiting period to see if your check clears or if you invest in some exotic instrument, it may take time to sell off your position. It can even take a few days for a stock trade to settle or for the custodian to process your request.
What are the qualified rules for early withdrawal from a Roth IRA?
Without penalty is early retirement via such things as disability. Other is toward usually once considered stable investment but a reduced penalty for down-payment purchasing a home.
Debt doesn't qualify but a lien of debt per legal filing a collections agent can go after IRA any accounts equating penalties - only about a few states in the United States of America have laws where this is not applicable.
Why is Roth IRA investment considered the best investment over a traditional IRA if deductions are pulled from a Roth which is contributed after taxes upon withdraw require no tax penalty. A traditional on top of any early with draw penalties also bares the burden of taxes required payment on withdrawn amounts. It is wise to check state laws if your IRA account is protected against debt garnishment. Also, Roth accounts are used upon retirement as an added feature of retirement investment hedging the expense of tax payments on other taxable upon withdraw retirement savings.
You would have to do an excess removal for the $3000 overage. The excess removal would now be treated as a distribution since it's after the deadline for the remove (would of had until Oct. 15 2002 to removal as an excess.
