This week's Slott Report Mailbag looks at Roth contributions and the prerequisites necessary to make a contribution. We also answer a question on investing inherited IRA money in an IRA annuity.
You can’t make a traditional or Roth IRA contribution for someone who is dead. The issue comes up when someone dies, for example your spouse, and you want to make an IRA contribution for your now deceased spouse. You figure that because he/she was eligible to make the contribution when he/she was alive, you will just make it for him. You will file a joint federal income tax return for the year, and maybe even claim a tax deduction for the IRA contribution you made for your deceased spouse. Unfortunately, you are not allowed to do that.
Please, please don't make the mistake that so many people make and think you make too much money to make an IRA contribution. There is no limit on how much income you can make in order to make an IRA contribution. None, whatsoever. Yet, each year I speak with countless financial advisors and CPAs who are advising their clients that they cannot make an IRA contribution for the year because their income is too high. That is not true and don't you believe it for one second!
As crisp temperatures and autumn colors cascade through our neighborhoods, people start eying year-end IRA and tax planning. We saw it in this week's Slott Report Mailbag with questions about a Roth conversion and paying the tax associated with it, distributions from inherited IRAs and the rules regarding what you can and can't do with RMDs (required minimum distributions).
Even though the 2011 tax season for most of us ended on April 17, 2012, some of us who made a timely IRA contribution for 2011 might have changed our mind on that IRA contribution. Specifically, some individuals who contributed to one type of IRA for last year may now want to change that contribution into a different type of IRA contribution.
Today is a very special day here at the Slott Report. Why is that, you ask? Well, today is the start of a brand new feature here at the blog called "5 Quick Questions." From time to time you will see new 5 Quick Questions on all sorts of IRA and retirement account related topics.
Financial Services Organization TIAA-CREF recently conducted a survey among Americans to gauge their understanding of IRAs. The less than stellar results are not surprising. We take a look at the survey below.
With Tax Day right around the corner, it is the perfect time to answer the most popular questions involving IRA and Roth IRA contributions. Below are five of the more popular questions.
IRAs and tax season go hand in hand. Below are a list of the most popular IRA tax-related questions we have been receiving over the last month or so. Make sure you are up to speed on what you can and can't do to get the most out of your tax return, and in turn, your retirement planning.
Prior to April 18, 2011, several articles posted in The Slott Report contained reminders about the importance of making your 2010 IRA contribution. Among other things, we indicated that $5,000 was the maximum amount you could contribute to your IRA for 2010, with an additional "catch up" contribution of $1,000 if you were age 50 or older on December 31, 2010. Click to read more about what is compensation for IRA and Roth IRA contribution eligibility.
