Question by Thomas D: How do I invest my money in a Roth IRA?
A friend told me that I should put my money in a Roth IRA for my future investments and retirement. I don’t know much about it and/or how to put my money into one but I am curious. I am a 17 year old emancipated minor in California who has a bank account already and a job.
Thanks for all the help in telling me what a Roth IRA is and how to put my money in one (if I even should) in advance.
Best answer:
Answer by brad
I had opened an ira a few years back through my local brokerage. An ira is good for gains made and not paying the regular taxes on them. good for someone looking to retire with a nestegg. If you need access to the cash or may change your mind within a few years? Don’t get one. if you take out too soon under the rules, you will be charged the taxes. I’m not sure if 17 would be eligible either?
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Question by clash_of_civilizations: How do I calculate taxes when converting a Traditional IRA with TIPS to a Roth IRA?
I have a traditional IRA which contains TIPS (treasury inflated protected securities). How do I calculate taxes when converting the IRA to a Roth IRA?
Best answer:
Answer by Robert B
TIPS has nothing to do with it. You are converting dollars put away before paying taxes to dollars put away after you pay taxes. Figure out your tax rate and multiply by the amount in the IRA. Can get gruesome. Why convert??? Your tax impact should be less when you retire and you withdraw your money at 70 and 1/2.
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I am a US citizen, working (since 4 years ago) as a teacher in China. I earn $40000 per year and this income is excluded from my tax return. I am taxed in China, so I presume my accountant did this exclusion for me so I don’t pay taxes in the US for this income.
I have learned that I cannot use this income to contribute to a ROTH-IRA.
My question is: should I go back on the decision to exclude this income from US taxes? This would mean I have to pay taxes on it. But it would let me contribute $5000 to the ROTH.
Which one is better to have? A ROTH with the tax free compounding that it brings, or a higher income out of which I cannot contribute to a ROTH (but I can contribute to other, taxable vehicles)?
Thank you!
Question by Brian T: Is it possible to change a Roth IRA to a traditional IRA?
I am young, and I know most financial advisors/calculators out there tell you I would stand to benefit from being in a ROTH IRA. However, after researching this, I know longer believe there’s any guarantee the gov’t will keep the policy of not taxing my returns when I retire 30 years from now. I’d rather take the tax benefit now. Your thoughts?
Best answer:
Answer by dan
If you contributed the money into the Roth this year (2007) you can do what is called a “recharacterization.” The company you invest with will have a form to fill out. The only thing is, you can recharacterize THIS year’s contribution back to the traditional IRA, but any contributions you made to a Roth in prior years cannot be recharacterized.
What do you think? Answer below!
Question by roth: When calculating income for Roth IRA eligibility, do capital gains count toward the total?
I know about the 99k-114k phaseout for single filers in 2007. So for example, if you made 90k in salary and had 25k in capital gains would you be able to contribute to a Roth IRA?
Best answer:
Answer by Spock (rhp)
capital gains do count
see IRS Pub 590 for the details of how to modify AGI for this calculation
http://www.irs.gov/publications/p590/ch02.html#d0e9254
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Question by ferggkeane: I want to rollover my traditional ira to a Roth ira verses?
I only have $ 5000 in traditional, and want to roll it over now because i’m taxed in the 15% tax range. And when i but it in a roth ira, it’ll be tax free when i take it out when i retire. Verses the traditional ira, which would be taxed at a higher rate when i retire in 20 years, ( that is if i’m in a higher tax braket). Does this sound like a smart thing to do?
Best answer:
Answer by badgerboise
Rolling it over to a Roth IRA is a fine idea to prevent being taxed on future earnings. However, bear in mind that if the $ 5000 you presently have in the traditional IRA was deposited as a tax exempt, you will be required to pay the tax on that amount in the year you roll it over. If you do a rollover, it is easier if you do not let the money pass through your hands in making the transfer. That way if a snag occurs, you are not responsible for any penalties or taxes.
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Question by Kai: How do I declare roth IRA contribution for taxes?
I contributed $ 5,000 to my roth IRA in 2008. How do I declare this when filing taxes? My company has not provided any 1099 or other document, are they supposed to? I plan to file my taxes using Turbo Tax, how/where should I declare the contribution?
Awesome, thanks for the answers. I knew it wasn’t tax deductible, I just thought I had to declare the contribution as income. Thanks all for the clarification.
Best answer:
Answer by chatsplas
DON’T.
It’s Post-tax dollars.
Why aren’t you contributing to a 401k or traditional IRA? Then you get tax advantages. Can make contribution to IRA up to tad date.
What do you think? Answer below!
Question by momo: What’s the 2008 contribution limit for Roth 401k and Roth IRA combined?
Like the question asks what is the combined total limit for the Roth 401k and the Roth IRA? I’ve read too much conflicting information that you can contribute the full 5k in the Roth IRA and 14k in the Roth 401K? Then I’ve checked with financial advisors and they indicate otherswise. Hm, please CITE sources with your response, need accurate information.
Lastly, if anyone know what the combined limit between the Roth401k, Roth IRA and the traditional 401k also list it as well.
Thanks!
Can Icontribute to all three: Roth 401k, 401k and the Roth IRA?
I know you can do the last two but what about all three?
I am of course referring to just partial amounts so I don’t exceed the 15k annual limit and the as far as I know the 5k limit for the Roth IRA is considered separate. Thanks!
Forgot to mention within the Roth IRA AGI limits and under the age of 50.
Best answer:
Answer by v b
The 401K roth is simply another 401K choice. If the limit is $ 15,000, then if you put $ 10,000 into the ROTH 401K, you only have a potential $ 5,000 for the regular 401K.
Since a regular 401K doesn’t prevent one from contributing to a ROTH IRA, a ROTH 401K won’t prevent one either.
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Question by Pure_Alpha: Can I have a Roth IRA and open a SEP-IRA for my business?
I own my own business (its a C Corp) and I have a Roth IRA from a previous job. I would like to open a SEP-IRA for my business (no other employees yet). I want to put my paycheck in the SEP. (Ithink I can deposit $ 45K/yr tax free into a SEP.) Can I have two retirement accounts?
Best answer:
Answer by digdowndeepnseattle
Yes you can have a Roth and a SEP. Because you’re a C-Corp and not considered self-employed you can’t put 45k in the SEP (2007 number, it’s 44 in 2006) unless you make(made) over 180k. SEP contributions are limited to 25% of your income. And, if you made that much then you can’t contribute to the ROTH as you exceed the income limitation for that.
If you anticipate making less than 180k in w-2 wages then you should consider a solo-401k. To maximize your contribution in that plan you only need to make 118,000.
And, if you do make over the 180k and are over age 50 then you should STILL consider a 401k as you can get 50k into one of those.
Also, if you anticipate having employees then definately a 401k….you don’t have to put nearly as much in for them in that vehicle.
Lastly, it’s not tax free…it’s tax deferred.
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Question by Mike201JC: Does transferring a Roth IRA to another institution impact the five year rule for qualified distributions?
If I transfer a Roth IRA from one financial institution to another, will the five year waiting period for tax-free qualified distributions be impacted, or will it still be calculated from the date I first contributed to the IRA at the original institution?
Best answer:
Answer by Bash Limpbutt’s Oozing Cyst©
No, rollovers between like type accounts (i.e. Roth to Roth) do not affect the calendar at all.
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