Jan 30

How are distributions from a Traditional IRA taxed?

Distributions from a traditional IRA are taxed as ordinary income, but if you made nondeductible contributions, not all of the distributions will be taxable.

In order to enforce the policy that IRAs be used for retirement savings, not for pre-retirement uses or for building an estate to pass on to heirs, the rules prohibit or strongly discourage both distributions before retirement age and distribution schemes that would leave most of an IRA undistributed at the end of the taxpayer’s life expectancy.

Internal Revenue Code Section 72(t) imposes a tax equal to 10 percent of certain early distributions from IRAs (exclusive of portions considered a return of nondeductible contributions). The tax, which is payable in addition to the regular income tax on the distribution, applies to all IRA distributions but the following:

  • Distributions to an IRA contributor after age 59 1/2 or on account of his or her disability.
  • A series of substantially equal periodic payments, regardless of the taxpayer’s age when they begin, if the payments are made annually or more frequently and continue for the life or lives of the taxpayer or the taxpayer and a beneficiary.
  • Distributions to the estate or beneficiary of an IRA contributor after the contributor’s death.
  • A distribution “on account of” an IRS levy.
  • Distributions to alternate payees under qualified domestic relations orders (QDROs).
  • Distributions not exceeding the deduction allowed to the taxpayer for the year for medical expenses (generally, the amount by which expenses for medical care for the taxpayer, spouse, and dependents exceeds 7.5 percent of adjusted gross income).
  • Distributions after the owner’s “separation from employment” not exceeding amounts he or she pays for health insurance, provided (1) the individual receives unemployment compensation for at least 12 consecutive weeks, (2) unemployment compensation is received during the year of the distributions or the preceding year, and (3) the distributions occur before the owner has been reemployed for more than 60 days.
  • Distributions not in excess of the owner’s “qualified higher education expenses” for the taxable year.
  • “Qualified first-time homebuyer distributions.”

Please contact one of our IRA Experts at 800-472-0646 for more information.

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Jan 29

Transferring a Roth IRA to a Self Directed Roth IRA

Individuals may generally transfer Roth IRA or rollover eligible qualified retirement plan assets into a self-directed Roth IRA LLC structure. Individuals may not rollover Roth IRA funds into a qualified retirement plan, such as a Solo 401(k) Plan or a pre-tax IRA account, such as a Traditional IRA or SEP IRA.

What is the most Common Way to Fund a Self-Directed Roth IRA?

Transfers and rollovers are types of transactions that allow movements of assets between like IRAs – Roth IRA to Roth IRA. Note – only after-tax funds can be rolled into a Roth IRA. No pre-tax retirement funds are eligible to be rolled into a Roth IRA.

Roth IRA Transfers to a Self-Directed Roth IRA

A Roth IRA-to Roth IRA transfer is one of the most common methods of moving assets from one Roth IRA to another. A transfer usually occurs between two separate financial organizations, but a transfer may also occur between Roth IRAs held at the same organization. If a Roth IRA transfer is handled correctly the transfer is neither taxable nor reportable to the IRS. With a Roth IRA transfer, the Roth IRA holder directs the transfer, but does not actually receive the Roth IRA assets. Instead, the transaction in completed by the distributing and receiving financial institutions. In sum, in order for the Roth IRA transfer to be tax-free and penalty-free, the Roth IRA holder must not receive the Roth IRA funds in a transfer. Rather, the check must be made payable to the new Roth IRA custodian. Also, there is no reporting or withholding to the IRS on a Roth IRA transfer.

The retirement tax professionals at the IRA Financial Group will assist you fund your Self-Directed Roth IRA LLC by transferring your current Roth IRA funds to your new Self-Directed Roth IRA structure tax-free and penalty-free.

How to Transfer a Roth IRA to a Self-Directed Roth IRA LLCHow the Roth IRA to Self-Directed Roth IRA Transfer Works?

Your assigned retirement tax professional will work with you to establish a new Self-Directed Roth IRA account at a new FDIC and IRS approved Roth IRA custodian. The new custodian will then, with your consent, request the transfer of your Roth IRA assets from your existing Roth IRA custodian in a tax-free and penalty-free Roth IRA transfer. Once the Roth IRA funds are either transferred by wire or check tax-free to the new Roth IRA custodian, the new custodian will be able to invest the Roth IRA assets into the new Roth IRA LLC “checkbook control” structure. Once the funds have been transferred to the new Roth IRA LLC, you, as manager of the Roth IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

60-Day Rollover Rule

An individual generally has sixty (60) days from receipt of the eligible rollover distribution from a Roth IRA account to roll the funds into a Self-Directed Roth IRA LLC structure. The 60-day period starts the day after the individual receives the distribution. Usually, no exceptions apply to the 60-day time period. However, in cases where the 60-day period expires on a Saturday, Sunday, or legal holiday, the individual may execute the rollover on the following business day.

An individual receiving an eligible rollover distribution may rollover the entire amount received or any portion of the amount received. The amount of the eligible rollover distribution that is not rolled over to a Roth IRA is generally included in the individual’s gross income and could be subject to a 10% early distribution penalty if the individual is under the age of 591/2.

How the 60-Day Rollover Works with a Self-Directed Roth IRA

The retirement tax professionals at the IRA Financial Group will assist you in rolling over your 60-day eligible rollover distribution to a new FDIC and IRS approved IRA custodian. Once the 60-day eligible rollover distribution has been deposited with the new Roth IRA custodian within the 60-day period, the new custodian will be able to invest the Roth IRA assets into the new Roth IRA LLC “checkbook control” structure. Once the Roth IRA funds have been transferred to the new Roth IRA LLC, you, as manager of the Roth IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

Self-Directed Roth IRA Transfer Experts

The retirement tax professionals at the IRA Financial Group will assist you in transferring your Roth IRA tax-free and penalty-free to a “checkbook control” self-directed Roth IRA LLC solution. Each client of the IRA Financial Group will work directly with an assigned retirement tax professional to establish the Self-Directed Roth IRA LLC solution and make sure that the self-directed IRA transaction is structured in the most tax efficient manner and is not in violation of any IRS rules.

To learn more about the Self-Directed Roth IRA transfer or direct or indirect rollover rules, please contact a tax professional at 800-472-0646.

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Jan 27

IRS Rules and Guidelines for Self Directed IRAs

Self-Directed IRA are generally permitted to engage in most types of investments, however, if a Self Directed IRA engages in certain types of “prohibited transactions” or invests in life insurance or collectibles you may jeopardize the tax-deferred status of your IRA account. This could lead to the disqualification of the IRA and severe tax consequences. Therefore, it is important that you familiarize yourself with the IRA rules.

IRS Rules and Guidelines for Self Directed IRAsSwanson v. Commissioner , 106 T.C. 76 (1996) is a landmark case confirming the ability of IRAs to create and invest in entities. Mr. Swanson caused his IRAs to form and own two corporations. He was director of each but never owned any stock himself. Mr. Swanson then directed the custodian of the IRA to purchase all the original issue stock of the entity. The Tax Court held that initial formation of the company by the IRA is not a prohibited transaction under Internal Revenue Code Section 4975 because the sale of stock to the IRA was not a sale or exchange of property between a plan (the IRA) and a disqualified person within the meaning of Code Section 4975(c)(1)(A).  The Tax Court also held that receipt of dividends by the IRA from the company was not a prohibited transaction because the dividends did not become IRA assets until they were paid . The Tax Court also held that Mr. Swanson’s performance of management functions, as director of the company, was not a prohibited transaction. However, the Tax Court did state that after creation of the entity, the entity became a “disqualified person”.

In FSA 200128011 the IRS affirmed Swanson and stated: *”In light of Swanson, we conclude that a prohibited transaction did not occur under section 4975(c)(1)(A) in the original issuance of the stock of FSC A to the IRAs in this case. Similarly, we conclude that payment of dividends by FSC A to the IRAs in this case is not a prohibited transaction under section 4975(c)(1)(D). We further conclude, considering Swanson, that we should not maintain that the ownership of FSC A stock by the IRAs, together with the payment of dividends by FSC A to the IRAs, constitutes a prohibited transaction under section 4975(c)(1)(E).”*

If you have any questions in regards to the IRS rules on Self-Directed IRAs, please contact one of our IRA Experts @ 800.472.0646.

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Jan 26

Some More Basics About the IRA

An Individual Retirement Arrangement or IRA is a tax-advantaged savings vehicle used to save for retirement.  It’s different than 401(k) and other defined benefit plans that might be available to you at your job.  Here are some of the key points of IRAs.

Some More Basics About the IRAFirst, you need to decide what kind of IRA is right for you: a traditional plan or the Roth option.  The main differences between the two are when contributions are taxed, income restrictions and withdrawal rules.  For traditional IRAs, contributions are made with pre-tax dollars (and not taxed until you withdraw), you may receive a tax deduction but early withdrawals (before age 59 1/2) are hit with a 10% penalty.  Once you reach age 70 1/2, you must start taking required minimum distributions (RMDs), whether you need to or not.  Roth IRAs are not subject to a tax deduction and are funded with after-tax dollars.  However, all qualified distributions are tax-free!  There are income limitations as to who can contribute directly to an IRA and Roth IRAs are not subject to RMDs.

The basic rule of thumb when deciding between the two is if you are young and not at your full earning potential, go with a Roth.  If you are older and have reached your max salary, go traditional.

Contributions limits are the same for each type of account.  For both 2014 and 2015, you may contribute up to $5,500 or your earned income for the year, whichever is less.  Further, if you are age 50 or older, you may contribute an additional $1,000 as a ‘catch-up’ contribution.  So long as you have income earned during the year, you may contribute to an IRA.

Withdrawals can be made at any time but may be subject to taxes and penalties.  If you withdraw from a traditional IRA before age 59 1/2 you will be subject to a 10% penalty along with any taxes due.  You may withdraw your contributions to a Roth IRA at anytime without penalty (since they were already taxed) but will be penalized if you withdraw earnings.  Other rules apply as well, such as hardship withdrawals.

Lastly, you should name beneficiaries for your IRA(s).  In the event of your death, your IRA will pass onto them and they will receive the benefits of tax-advantaged savings.

Since every individual situation is different, you should talk to a trained professional to see what’s best for your situation.  If you have any questions, please contact an IRA Expert at the IRA Financial Group @ 800.472.0646.

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Jan 23

President Obama’s Proposal to Increase Capital Gains Tax Rate Expected to Create Strong Demand for Self-Directed Real Estate IRA

With President Obama proposing capital gain increases for the wealthy, investors expected to look to focus on maximizing retirement assets with self-directed IRA real estate

President Obama’s Proposal to Increase Capital Gains Tax Rate Expected to Create Strong Demand for Self-Directed Real Estate IRAIRA Financial Group, the leading provider of “checkbook control” self-directed IRA LLC and Solo 401(k) plan solutions, expects to experience a growth in demand from wealthy retirement investors looking to use IRA funds to buy real estate and generate tax-deferred income in light of a call for capital gains increases for the wealthy. Based on a January 19, 2015 report by CNN, IRA Financial Group expects the President in his State of the Union speech on January 20, 2015, will propose several new economic ideas, including tax hikes on capital gains. IRA Financial Group expects that the president will propose raising the capital gains rate to 28 percent, up from 20 percent, which is the maximum most taxpayers pay now. According to CNN, the President is also expected to propose increasing the capital gains and dividends tax rate from 23.8% to 28% for couples earning more than $500,000 a year.

“We believe wealthy investors with retirement funds will take note of the expected tax increases and will start looking at retirement solutions that can help minimize the expected capital gains tax increase,” stated Adam Bergman, a tax partner with the IRA Financial Group.

“I think it is fair to assume that there will be a surge in wealthy Americans seeking to establish a self-directed real estate IRA LLC to make deferred investments and avoid the increased capital gains tax,” stated Mr. Bergman, Esq.

The primary advantage of using a Self Directed IRA LLC to make investments is that all income and gains associated with the IRA investment grow tax-deferred.

Using IRA Financial Group’s self directed IRA LLC or solo 401(k) plan with “checkbook control” solution to make real estate investments offers a number of very interesting investment opportunities, including the ability to diversify ones retirement portfolio with real estate, precious metals, and other alternative investment options, as well as generate tax-deferred income. “By making year-end self-directed real estate IRA investments, retirement investors can generate tax deferred income or gains, “ stated Mr. Bergman.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control” Self Directed real estate IRA Facilitator. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Jan 21

How is UDFI calculated on the sale of a debt-financed asset?

Internal Revenue Code Section 514 requires debt-financed income to be included in unrelated business taxable income. It was enacted in 1969 for reasons best understood in their historical context.

Under Internal Revenue Code Section 514 , if an exempt organization owns “debt-financed property,” some portion of each item of gross income from the property, and a like portion of all related deductions, are included in unrelated business taxable income, whether the income is in the form of rent, interest, gain on disposition of the property, or some other character. Property is debt-financed if it is held for the production of income, its use is not substantially related to the organization’s exempt purposes, and there is acquisition indebtedness with respect to the property. The term “acquisition indebtedness” generally includes any liability incurred before, contemporaneously with, or after the acquisition or improvement of the property if it arose because of the acquisition or improvement or if the need for the indebtedness was foreseeable at the time of the acquisition or improvement.

How is UDFI calculated on the sale of a debt-financed asset?Under Internal Revenue Code Section 514(b)(1), property is “debt-financed property” if it is held to produce income and “acquisition indebtedness” with respect to the property exists at any time during the taxable year (or, in the case of a disposition, at any time during the preceding 12 months). The application of Internal Revenue Code Section § 514 has a wide application. For example, it has been held that securities purchased on margin can be debt-financed property.

When a debt-financed asset is sold, a special rule applies for the purpose of calculating the taxable gain. The property’s average adjusted basis is the average of the adjusted basis as of the first day during the year in which the property is held by the organization and on the day the property is sold or disposed of. The percentage of gain taxed is the percentage that the average adjusted basis on sale or other disposition of debt-financed property is of the highest amount of acquisition indebtedness with respect to the property during the twelve-month period ending with the date of the sale or other disposition. The regulations permit adjustments to basis that include decreases in basis for depreciation for periods since the acquisition of the property and increases in basis for capitalized improvements or additions.

Please contact one of our Self Directed IRA Experts at 800-472-0646 for more information.

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Jan 20

Precious Metals for Self-Directed IRA Investors on The Rise in Light of Unstable Global Currency Markets

Interest in precious metals expected to rise for self-directed IRA investors in light of Swiss Bank decision to cancel currency floor with respect to the Euro

IRA Financial Group, the leading provider of “checkbook control” Self-Directed IRA LLC solutions expects to see an increase in demand from self-directed IRA investor looking to purchase gold and other precious metals in light of the recent unstable global currency markets. This is especially true in light of Swiss National Bank surprisingly announced it’s scrapping its currency floor with respect to the Euro. The Swiss central bank’s move is greatly increasing the apparent risk of holding the Swiss franc, which is now up 15% against the euro. The belief among self-directed IRA investors is that gold, which is considered a currency alternative and store of value, is a safe alternative to holding risky currencies. “Against a setting of fears about global growth, deflation and renewed currency volatility, gold has staged a climb higher since the start of November, 2014, stated Adam Bergman, a tax partner with the IRA Financial Group. “We expect to see strong demand from self-directed IRA investor looking to buy gold and other precious metals in order to diversify against the backdrop of volatile global financial markets, “ stated Mr. Bergman.

The IRS does not list the type of assets or investments that may be purchased with retirement funds, but does indicate which categories of assets or investments are not permitted.

The categories of transactions that are not permitted to be purchased using a Self-Directed IRA LLC can be found in Internal Revenue Code Sections 408 & 4975.

When it comes to coins or metals, Internal Revenue Code Section 408 is generally the provision that applies. In general, collectibles such as artworks, rugs, stamps, certain coins, beverages and antiques, etc. are not allowed within a Self-Directed IRA for precious metals, pursuant to Internal Revenue Code Section 408.

Precious Metals for Self-Directed IRA Investors on The Rise in Light of Unstable Global Currency MarketsInternal Revenue Code Section 408 is specific as to what defines a collectible. Some notable exceptions are allowed for certain gold (such as American Eagle) and silver coins and any coins issued by a state. Legislation in 1997 further liberalized the rules for IRAs by making reference to specific definitions of acceptable coins in USCS, title 31; IRC sections 5112(a), (e) and (k); the Commodity Exchange Act; and IRC section 408(m)(3).

According to Mr. Bergman, “there is a consensus among financial professionals across the globe that asset diversification is the key to retirement investment success. To reduce the risks of investing, they suggest the purchase of precious metals to diversify investments among different securities or asset classes. With IRA Financial Group’s self-directed IRA LLC precious metals solution, one can hold precious metals in your individual retirement account and generate tax-free income and gains.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Jan 16

How Long Does it Take to Set up a New Self Directed IRA?

The IRA Financial Group will take care of setting up your entire Self Directed IRA LLC structure in a matter of days. Our in-house tax and ERISA professionals will work with you directly to customize a structure that satisfies your tax and investment goals.

How Long Does it Take to Set up a New Self Directed IRA?The whole process can be handled by phone, email, fax, or mail. Our expert tax and ERISA professionals are on site greatly reducing the set-up time and cost. Our in-house retirement tax professionals will complete all the necessary IRA rollover or transfer paperwork and assist you in transferring your funds to the new passive custodian so that your funds will be available for investment in a matter of days. Typically it takes anywhere between 7 and 21 days for your funds to be transferred to your new “Checkbook Control” Self Directed IRA LLC. In most cases, we are able to complete the IRA LLC facilitation aspects of the transaction within a few days; however, the transfer of funds from one custodian to another can take some time depending on the financial institution and the type of assets being transferred. Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To get started or to learn more about the Self-Directed IRA LLC Structure, please contact one of our IRA Experts at 800-472-0646.

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Jan 15

Why Choose Us for Your Retirement Needs?

Expertise: The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP. With our work experience at some of the largest law firms in the country, our tax professionals’ retirement plan and tax knowledge in this area is unmatched.

Leadership: IRA Financial Group is the market’s leading* Self-Directed IRA and Solo 401K Plan provider. We have helped over 8,000 clients establish IRS compliant Self-Directed IRA and Solo 401k Plans and invest over $2.6 billion in alternative assets, such as real estate.

Prestige: IRA Financial Group and its founders have been featured on CBS News, PBS Nightly Business Report, and in over 100 major print publications, including Forbes, Fox Business, the Wall Street Journal, CNN Money, USA Today, The San Francisco Chronicle, Dallas Morning News, Law.com, American Lawyer, the Houston Chronicle, the Chicago Tribune, and many more.

Value: With IRA Financial Group, you no longer have to incur excessive fees to establish and administer an IRS compliant Self-Directed IRA LLC or Solo 401k Plan. We are committed to offering our clients customized professional services at a fair and reasonable price and we are able to deliver this by harmoniously blending professionalism, quality and efficiency.

Our Promise: If for any reason you elect to not go through with the Self-Directed IRA LLC structure or Solo 401(k) Plan, you will not be responsible for paying our one-time set-up fee – it’s that simple – no questions asked! Cancel anytime – we understand that in some cases plans change or an anticipated transaction does not materialize and we certainly don’t believe it would be fair to our clients to impose a fee for a structure that won’t be needed.

Access: When choosing the IRA Financial Group, you will have direct and unlimited access to our in-house tax and ERISA professionals, as well as our in-house CPAs. Unlike our competitors, we don’t limit your access to our tax professionals; in fact, you will likely have the opportunity to talk with one of them before you even get started. In addition, each client of the IRA Financial Group is assigned a retirement tax professional to assist in establishing an IRS compliant Self-Directed IRA LLC or Solo 401k Plan structure.

Security: IRS rules require your retirement funds to be transferred from custodian to custodian. We at the IRA Financial Group never have access to your retirement funds in any way. You, as the manager of the IRA LLC or trustee of the 401(k) Plan, will be the only party with direct access to your retirement funds – true “Checkbook Control”.

Integrity: We are guided by the rules of ethical conduct in all that we do. Our relationships with clients are built on trust, respect, and confidentiality.

Results: We are committed to our clients’ satisfaction and strive to meet and exceed our clients’ expectations.

Guarantee: The IRA Financial Group is fully committed to offering IRS compliant self-directed retirement structures and accordingly offers a full IRS audit guarantee in connection with the validity of the Self-Directed IRA LLC and Solo 401(k) Plan. The IRA Financial Group stands by the legality of the Self-Directed IRA LLC and Solo 401(k) Plan and will fully defend its merits against any IRS audit.

We respect your time! You will never be pestered by a salesperson or receive unsolicited emails!

The mission of IRA Financial Group is to empower prospective clients with relevant information needed to make informed decisions on investment activities conforming to tax law and IRS rules.

We leave the ball in your court to decide if you wish to proceed with us. Of course, we would welcome the opportunity to work with you. If you decide to be our client, we will be here for you step-by-step to set up the right structure for you and to help to make sure you implement it correctly.

Once again, we will not send unsolicited follow-up communications from our tax experts – we just respect your privacy and time.

Get started today: Getting started is quick, easy, and inexpensive. We take a small deposit up front to cover LLC state filing fees or Solo 401(k) Plan establishment costs, and our one-time set-up fee is only due once the structure has been established. In addition, our fee can be paid in full using your retirement funds.

Self Directed IRA LLC, Solo 401K, Business Acquisition Solution

IRA Financial Group will take care of setting up your entire IRS compliant Self-Directed IRA LLC or Solo 401K Plan. The whole process can be handled by phone, email, fax, or mail and typically takes between 7-21 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our tax and ERISA professionals are on-site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Solo 401k Plan. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.  For more information, please contact us @ 800.472.0646 today!

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Jan 13

Self Directed IRA Maximum Contribution Limits for 2015

The maximum contribution limit for a self-directed IRA for 2015 is $5,500 or $6,500 if you’re age 50 or older, or your taxable compensation for the year, if less. Contributions to a self-directed Roth IRA may be limited based on your filing status and income.

Contributions made to a self-directed IRA LLC must be made to the IRA administrator/custodian and may not be contributed directly to the LLC. Once the IRA contribution is made to the IRA administrator/custodian, the funds can then be transferred to the IRA LLC.

Self Directed IRA Maximum Contribution Limits for 2015Is my IRA contribution deductible on my tax return?

If neither you nor your spouse is covered by an employer retirement plan, such as a 401(k), your deduction is allowed in full.

For contributions to a traditional IRA, the amount you can deduct may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. In the case of a Roth IRA, contributions aren’t deductible.

Can I contribute to a traditional or Roth Self-Directed IRA if I’m covered by a retirement plan at work?

Yes, you can contribute to a traditional and/or Roth self-directed IRA even if you participate in an employer-sponsored retirement plan (including a SEP or SIMPLE IRA plan). If you or your spouse is covered by an employer-sponsored retirement plan, such as a 401(k) plan and your income exceeds certain levels, you may not be able to deduct your entire contribution.

Can I establish a self-directed IRA if only one spouse has earned income for the year?

Yes. If you file a joint return, you and your spouse can each make IRA contributions even if only one of you has taxable compensation. The amount of your combined contributions can’t be more than the taxable compensation reported on your joint return and cannot exceed the maximum IRA contributions for the year (for 2015 $5500 or $6500 if over the age of 50). It doesn’t matter which spouse earned the compensation.

How can I make a Roth IRA contribution if I earned too much money in 2015?

For 2015, if your modified adjusted gross income is below $181,000 and you file a joint return, you can make a Roth IRA contribution. For those who earned greater than $181,000 during the year, the IRS provides a formula, which will set forth the reduced maximum amount of Roth IRA contributions permitted for the year, if any.

One way to circumvent the Roth IRA income threshold rules, if to simply make an after-tax traditional IRA contribution and then convert the Traditional IRA into a Roth IRA. Since the Traditional IRA contribution was made after-tax there would be no tax on the Roth IRA conversion. This tactic was made possible when the IRS removed the income level restrictions for making Roth conversions in 2010.

Can I Make IRA contributions after age 70½

You can’t make regular contributions to a traditional IRA in the year you reach 70½ and older. However, you can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of your age.

To learn more about the self-directed IRA and self-directed Roth IRA contribution rules, please contact a self-directed IRA tax expert at 800-472-0646.

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