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| IRA FAQs |
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If you are under age 70-1/2, for the entire tax year, and have earned income, you are eligible to establish an IRA, even if you already participate in any type of Government Plan, Tax-Sheltered Annutiy, Simplified Employee Pension Plan or Qualified Retirement Plan (pension or profit sharing) established by an employer.
Yes. They would be considered nondeductible contributions to your IRA.
Deductibility of your deposit is based on whether you are an active participant in an employer-maintained retirement plan and your adjusted gross income and income tax filing status. You may be eligible for the maximum deduction, a partial deduction or no deduction.
You may deposit any amount up to 100% of your earned income or $4,000 for age 50 and under or $5,000 for age 50 and over, whichever is less.
A rollover distribution may not occur more than once in a 12-month period from each IRA you own. The 12-month limitation does not apply if the funds are transferred directly from one custodian/trustee into another or if they are rolled over into an IRA from a Qualified Retirement Plan or Tax-Sheltered Annuity.
If your spouse has earned income and you do not, you can establish a spousal IRA. You can deposit up to 100% of your spouses' earned income or $4,000 whichever is less.
Yes, the IRS imposes a 10% premature distribution penalty.
Yes. At 70-1/2 the IRS states you must begin to take minimum required withdrawals or severe penalties will be imposed.
IRA stands for Individual Retirement Account and is for individuals only. However, you should name a benefactor(s) for your account in the event of your death.
Your entire proceeds of the account will be received by your named benefactor(s).
It is used to shelter payments from a Qualified Retirement Plan, Tax-Sheltered Annuity or another IRA. You have 60 days from the time you receive the payment from your retirement plan to open a Rollover IRA.
Earned income is the salary or wages you receive as an employee. If you are self-employed, earned income is your net income for personal service performed for the business. All taxable alimony is considered earned income. Passive income such as interest, dividends and rental income is not considered earned income for purposes of funding an IRA.
The ROTH IRA taxes your funds as you put it into the account and is not taxed upon non-penalized distribution. The Traditional IRA doesn't tax your funds as you contribute, but imposes the tax upon withdrawal (distribution).
For the taxable year, IRAs can be opened any time between January 1 and the date your tax return is due for the year, excluding extensions. This due date is normally April 15 of the following year.
Anytime after age 59-1/2, if you become disabled, or if the distributions are part of certain periodic payments.
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