| QUESTION:I got to thinking about IRAs. I
| |
| | take annual minimum distributions from
|
| think this is how it works-Traditional
| |
| | your traditional IRA once you reach age
|
| IRA contributions are from dollars not
| |
| | 70 1/2. Once you turn age 70 1/2 you can
|
| taxed. Distributions from this type IRA
| |
| | no longer make contributions to a
|
| are then taxed upon withdrawal.ROTH IRA
| |
| | traditional IRA, even if you continue to
|
| contributions are from dollars taxed
| |
| | work and have earned income. Upon your
|
| during the year you make the
| |
| | death your beneficiaries will be taxed on
|
| contribution. Distributions from this
| |
| | distributions from an inherited
|
| type of IRA are not taxed upon
| |
| | traditional IRA.Part II - ROTH IRAYou can
|
| withdrawal.Am I correct?ANSWER:Part I -
| |
| | contribute to a ROTH IRA if your MAGI is
|
| Traditional IRAContributions to a
| |
| | less than $110,000.00 if Single or Head
|
| "traditional" IRA are either deductible
| |
| | of Household or $160,000.00 if Married
|
| or non-deductible. If you are an active
| |
| | Filing Joint.Contributions to a ROTH IRA
|
| participant in an employer-sponsored
| |
| | are made with "after-tax" dollars. ROTH
|
| pension plan, such as a 401(k), a 403(b)
| |
| | IRA contributions are never deductible.
|
| or a SEP, the amount of your traditional
| |
| | Qualified distributions from a ROTH IRA
|
| IRA contribution that is deductible is
| |
| | are totally tax-free.A qualified
|
| phased-out once your "modified" Adjusted
| |
| | distribution is one that is made after a
|
| Gross Income (MAGI) for tax year 2005
| |
| | 5-year holding period, beginning on the
|
| reaches $50,000.00 if filing as Single or
| |
| | first day of the first year you make a
|
| Head of Household, or $70,000.00 if
| |
| | contribution, and is made after you reach
|
| married and filing a joint
| |
| | age 59 1/2, or due to death or disability
|
| return.Deductible contributions are made
| |
| | or for a qualified "first-time" home
|
| with "pre-tax" dollars. If all of your
| |
| | purchase. The earnings portion of a
|
| contributions to all of your IRA accounts
| |
| | non-qualified distribution is fully
|
| over the years were fully deductible,
| |
| | taxable and may also be subject to a 10%
|
| then all IRA distributions are fully
| |
| | penalty.You do not have to begin taking
|
| taxable. Amounts that were "rolled-over"
| |
| | annual minimum distributions from a ROTH
|
| to an IRA from a pre-tax employer plan
| |
| | IRA when you reach age 70 1/2. You never
|
| like a 401(k) are treated as deductible
| |
| | have to touch the money in a ROTH IRA
|
| contributions.Non-deductible
| |
| | during your lifetime. You can continue
|
| contributions are made with "after-tax"
| |
| | to contribute to a ROTH IRA after you
|
| dollars. You have already paid income
| |
| | turn age 70 1/2 as long as you have
|
| tax on these contributions. Accumulated
| |
| | earned income. If you are still working
|
| non-deductible contributions make up your
| |
| | at age 80 you can contribute to a ROTH
|
| "basis" in the IRA. If some of your IRA
| |
| | IRA. Beneficiaries do not have to pay
|
| contributions over the years were
| |
| | income tax on distributions from an
|
| non-deductible, then a portion of any IRA
| |
| | inherited ROTH IRA.Copyright (c) 2005 by
|
| distribution is a tax-free return of your
| |
| | Robert D Flach LLCRobert D Flach is a tax
|
| after-tax contributions. The tax-free
| |
| | professional with 34 tax seasons of
|
| portion is determined by a special
| |
| | experience preparing 1040s for
|
| formula and is calculated on IRS Form
| |
| | individuals in all walks of life. He
|
| 8606.Many taxpayers have more than one
| |
| | writes THE WANDERING TAX PRO weblog ( the
|
| IRA account, and each account may have a
| |
| | free online monthly newsletter STUFF AND
|
| different mix of deductible and
| |
| | SUCH ( and the website which has a
|
| non-deductible contributions. However,
| |
| | wealth of tax planning and preparation
|
| when you calculate the tax-free portion
| |
| | advice and information. He also writes
|
| of a traditional IRA distribution all
| |
| | and publishes THE FLACH REPORT, a
|
| monies in all traditional IRA accounts
| |
| | quarterly print tax newsletter.
|
| are lumped together.You must begin to
| |
| |
|
