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.
If you are thinking about going back to school but don't have the money, you can potentially use your IRA to pay for higher education expenses. Unfortunately, the distribution from your Traditional IRA will be taxable.
The Slott Report Mailbag is back with three consumer questions that run the gambit of IRA-distribution and retirement planning. Can you use an IRA as security for a loan? How do you handle inherited IRAs for you and your wife? Can an employer have both a SEP and a SIMPLE plan for their employees? You have come to the right place for the answers.
You want to leave your Roth IRA to your grandchildren. You are worried about required distributions at age 70 ½ if you are still working. You want to know all of the tax specifics of a year-end Roth conversion. You have come to the right place, a special post-holiday Monday edition of The Slott Report Mailbag.
It is vital that IRA owners name both primary and contingent beneficiaries. Failure to have a beneficiary in place at death could result in the loss of the extended payout, that is, the stretch IRA. Why? If the IRA owner’s beneficiary dies before the IRA owner and no contingent beneficiary was ever named, the IRA owner’s estate is usually the default beneficiary. The estate does not have a life expectancy to use for stretch distributions.
This week's Slott Report Mailbag covers some common questions we receive each week. One question deals with the date of a person's first required minimum distribution (RMD), another with a family member using their IRA to purchase their son's mortgage and a third on combining an inherited IRA with an individual's own IRA.
Hurricane Sandy, also known as "Super-Storm Sandy," did considerable damage in the Northeast part of the United States. As a result, the IRS issued several news releases describing the postponement of certain tax-related deadlines for victims affected by Hurricane Sandy. These postponements also apply to IRA and other retirement plan deadlines. The relief applies to many counties in New Jersey, New York, and Connecticut.
We now turn our focus from the election (although the issues remain) to year-end financial planning and helping both consumers and financial advisors obtain the expert information they need to come together and form a perfect retirement team. This week's Slott Report Mailbag includes questions (and our answers) on inherited IRAs and tax forms and a 3-part question on the Roth conversion process.
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.
If you are an IRA owner or an IRA beneficiary, you will have to make a federal income tax withholding choice when you take a distribution. The reason you have to make a withholding choice is because IRA distributions are taxable. In most cases, the withholding election is built into the withdrawal form provided by the custodian. You can be penalized for underestimating your tax liability.
