Roth IRA, Traditional IRA, 401K http://www.iraroth.net IRA Questions and Answers Tue, 17 Jan 2012 00:09:43 +0000 en hourly 1 http://wordpress.org/?v=3.3.1 Options inside a Roth IRA‏ http://www.iraroth.net/2012/01/options-inside-a-roth-ira%e2%80%8f/ http://www.iraroth.net/2012/01/options-inside-a-roth-ira%e2%80%8f/#comments Tue, 17 Jan 2012 00:09:18 +0000 admin http://www.iraroth.net/?p=517 Question:

I have a nightmare situation.
I bought $4,000 of calls inside my Roth IRA.  The day it was expired, it was way out of the money.  Unfortunately for me, it closed in the money by 12 cents the last 10 minutes of trading.  I tried to close the position, but wasn’t able to do so before the market closed.  The following day, I owned the underlying security, and it moved almost 6 points on me.  The bottom line is I lost over $45,000.  I need to pay this to the broker-dealer, even though my entire account was only worth $8,000.  SO….I need to pay this amount.  Can I write if off at least?  I’m not sure this is possible because it’s in a Roth IRA.  Help please.

]]> http://www.iraroth.net/2012/01/options-inside-a-roth-ira%e2%80%8f/feed/ 0 Need help tracking down my roth IRA‏ http://www.iraroth.net/2012/01/need-help-tracking-down-my-roth-ira%e2%80%8f/ http://www.iraroth.net/2012/01/need-help-tracking-down-my-roth-ira%e2%80%8f/#comments Tue, 17 Jan 2012 00:08:19 +0000 admin http://www.iraroth.net/?p=515 Question:

Back in 2007 or 2008 I set up a roth IRA.  i was living with my grandparents at the time, and as embarrassing as this is I have no idea how to find my roth IRA and what’s going on with my money.  Any help or guidance would be greatly appreciated.

]]> http://www.iraroth.net/2012/01/need-help-tracking-down-my-roth-ira%e2%80%8f/feed/ 0 Rollover Roth IRA to Another Trustee‏ http://www.iraroth.net/2011/12/rollover-roth-ira-to-another-trustee%e2%80%8f/ http://www.iraroth.net/2011/12/rollover-roth-ira-to-another-trustee%e2%80%8f/#comments Sat, 03 Dec 2011 00:07:47 +0000 admin http://www.iraroth.net/?p=509 Question:

I want to move my Roth IRA from one trustee to another for private reasons.I requested the current trustee to rollerover the funds to the new trustee, but instead, I received a check via mail. I plan to send the check to the new trustee.
Are there tax consequences for receiving this check? Will IRS penalize the funds I am sending to the new trustee?
Thank you for your cooperation.

Best answer:

Trustee-to-trustee transfer of your Roth IRA – Is it a tax-free transaction?

Are you thinking of transferring your Traditional IRA from one trustee to another? If answered yes, you must be facing a plethora of questions regarding the charges and the taxes that you may have to pay for the entire transaction. Well, for all those baby boomers, who have been bad at managing their finances, it is always advised that saving money in a retirement account like a 401(k), 403(b) or a Roth IRA account is necessary to avoid debt.  Though debt consolidation options are there to help the seniors get out of debt but savings is always the best way to stay on top of your finances. With the present unemployment rate hovering around stubbornly at the 9% rate and the high level of dissatisfaction of the people with their salary structure, most people frequently change jobs to boost their income. In such a situation, what happens to their Roth IRA accounts? What if someone wants to transfer the entire account to the new trustee? Read on to educate yourself on some solved doubts on Roth IRA conversion.

Are the Roth IRA rollover rules changing?

Since its December, 2011, its time to implement some changes in the Roth IRA conversion rules. But before addressing the rules on the conversion, let’s have a look at the rules that entail the Roth IRA rollover from one trustee to another. If you want to complete a successful Roth IRA rollover, you have to follow certain things like:

You need to own a well-established Roth IRA account
Your income should be within the limit of the Adjustable Gross Income (AGI) under the limits of the IRS
You have to pay taxes if necessary
Move the distributions from one trustee to another or from one qualified plan to another within 60 days.

A simple guide to a trustee-to-trustee transfer of your Roth IRA account

Most people are confused about the tax reporting process on the transferring Roth IRA accounts. If you’re executing a company-to-company transfer of your Roth IRA account, the IRS does not require you to report the transaction. However, if the transfer is reported as a rollover, it needs to be reported to the IRA. A rollover is when you take out the entire fund from one custodian’s account and transfer it to yet another one. This entire process should be done within 2 months and what matters to the Internal Revenue Service (IRS) is the process in which the funds are conveyed from the old trustee to the new one. Here are some steps.

Start a new IRA account: When you’ve chosen your new trustee or custodian, you’re supposed to open a new IRA account. You may choose a brokerage, company or even a bank.
Ask the custodian to initiate a transfer: Your next job is to ask your new custodian to set off a trustee-to-trustee transfer from your Roth IRA account. You may need to fill out a form where you may have to give the information about your old Roth IRA account, its name and account number.
Opt for the trustee-to-trustee transfer: Instead of choosing the rollover option, you should choose the trustee-to-trustee transfer option. In the direct transfer method, the old IRA trustee transfers the money to your new trustee instead of giving you a check.
Verify with your new trustee: After the funds are transferred, you should check with the receiving trustee for getting the verification of the completed deal. They should get in touch with the old company on your behalf.
Decide the new investment options: Soon after your funds are transferred to the new trustee, you should choose the new investment options to maximize your benefits. You need not report the Internal Revenue Service (IRS), because the funds had sidestepped you and were deposited directly to your new account.

So, if you’re wondering about the ways in which you can transfer your Roth IRA account to another trustee, you should go through all the above mentioned points. If you’re simply transferring the amount, you need not worry about reporting to the IRS.

Jason Holmes is a regular writer with http://www.debtconsolidationcare.com/ and is also a contributory writer with other financial sites. His expertise is woven around various aspects of the debt industry and with his e-books he tries to impart to people the different situations and simple solutions to get out of difficult situations. Some of his works include e-books like ‘Credit Score The Quintessential Therapy for a Happy Pocket’, Take Creditors and Collection Agencies to Small Claims Court’ and, My Story- From Depression To a Smile’.

]]> http://www.iraroth.net/2011/12/rollover-roth-ira-to-another-trustee%e2%80%8f/feed/ 0 What to do with the capital gain from the excess roth IRA contribtution? http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/ http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/#comments Sun, 30 Oct 2011 22:46:25 +0000 admin http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/ Question by NewIntheCity: What to do with the capital gain from the excess roth IRA contribtution?
I overcontributed $ 1200 to my roth IRA for 2006. This contribution has made some capital gain. I understand that I need to file a IRA distribution to take out the excess contribution to avoid IRA penalty. However, what should I do with the gain from the excess contribution?

Thanks,

Best answer:

Answer by jerry
Earnings on the excess will be considered as received in the year the contribution was made, and are taxable for that year, plus the 10% penalty (assuming you are under 59 1/2).

You can possibly avoid the excise tax if you more the excess Roth contribution and the earnings on the excess either by transferring to a regular IRA (trustee-to- trustee) before the deadline for the year in which the contribution is made.

I would probably suggest contacting your IRA broker to see if they can help you out and offer any alternatives.

Give your answer to this question below!

]]> http://www.iraroth.net/2011/10/what-to-do-with-the-capital-gain-from-the-excess-roth-ira-contribtution/feed/ 0 How do I go about getting a Roth IRA started? http://www.iraroth.net/2011/10/how-do-i-go-about-getting-a-roth-ira-started/ http://www.iraroth.net/2011/10/how-do-i-go-about-getting-a-roth-ira-started/#comments Thu, 20 Oct 2011 17:44:08 +0000 admin http://www.iraroth.net/2011/10/how-do-i-go-about-getting-a-roth-ira-started/ Question by Xanctity: How do I go about getting a Roth IRA started?
I’m 23, married, and interested in opening a roth IRA but I have no idea where to go, what bank to use or what my options are. I’ve done my research and know that this is the type of account I want but haven’t been able to find advice on how to get the ball rolling. Any advice or suggestion would be appreciated =)
Also, what is the minimum amount to open the account?

Best answer:

Answer by SEC
When it comes to investments, it is usually in your best interest to seek the aid of a professional. A Certified Financial Planner in your area can not only help weed through the countless choices you have, but also show you how the investment fits into your overall financial picture. Check out www.cfpboard.org to find a planner in your area.

Know better? Leave your own answer in the comments!

]]> http://www.iraroth.net/2011/10/how-do-i-go-about-getting-a-roth-ira-started/feed/ 2 What do you do when you make Roth IRA contributions for a year in which your annual income exceeds the limits? http://www.iraroth.net/2011/10/what-do-you-do-when-you-make-roth-ira-contributions-for-a-year-in-which-your-annual-income-exceeds-the-limits/ http://www.iraroth.net/2011/10/what-do-you-do-when-you-make-roth-ira-contributions-for-a-year-in-which-your-annual-income-exceeds-the-limits/#comments Sun, 16 Oct 2011 22:12:05 +0000 admin http://www.iraroth.net/2011/10/what-do-you-do-when-you-make-roth-ira-contributions-for-a-year-in-which-your-annual-income-exceeds-the-limits/ Question by phxsunsfanaz: What do you do when you make Roth IRA contributions for a year in which your annual income exceeds the limits?
Let’s say a couple made Roth IRA contributions for 2005 in Feb 2005. In 2006, they realized that their 2005 income was much higher than they originally expected and exceeded the $ 160K limit for couples. What are the options available now to undo it?

Best answer:

Answer by ThaneTheBrain
You better talk to a tax person. If you’ve filed already, and took the deduction, then you’ll have to amend. But if you went to file and realized your mistake, they can help you back out your money.

What do you think? Answer below!

]]> http://www.iraroth.net/2011/10/what-do-you-do-when-you-make-roth-ira-contributions-for-a-year-in-which-your-annual-income-exceeds-the-limits/feed/ 0 Where is the best place to put Roth IRA money with objective of preserving capital? http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/ http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/#comments Fri, 23 Sep 2011 22:05:58 +0000 admin http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/ Question by Set: Where is the best place to put Roth IRA money with objective of preserving capital?
Regarding a Roth IRA investment; does buying a Tax Exempt Bond make sense over a Taxable Bond Fund? At this time, which is better; Short, Long, or Intermediate Term? Do you have any specific recommendations within the Vanguard family of funds? Right now everything is in a money market fund. Thanks in advance.

Best answer:

Answer by richard t
the roth is tax free.you pay going in..no tax coming out……………..tax exempt is not for you…………you do not say what your time horizon is………………preservation of capital…the safe way is treasury bills, bonds and notes……………don’t buy anything with more than a 2year maturity and buy some every couple of months to hit the average………….If you have a lot of time till retirement. you might want to risk a bit more,,pick up ”the little book that beats the market’…..it sets you thinking…………..
i

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]]> http://www.iraroth.net/2011/09/where-is-the-best-place-to-put-roth-ira-money-with-objective-of-preserving-capital/feed/ 3 Does how much you contribute into a roth IRA, take that much away from your taxible income? http://www.iraroth.net/2011/09/does-how-much-you-contribute-into-a-roth-ira-take-that-much-away-from-your-taxible-income/ http://www.iraroth.net/2011/09/does-how-much-you-contribute-into-a-roth-ira-take-that-much-away-from-your-taxible-income/#comments Mon, 12 Sep 2011 01:43:24 +0000 admin http://www.iraroth.net/2011/09/does-how-much-you-contribute-into-a-roth-ira-take-that-much-away-from-your-taxible-income/ Question by B. Cummings: Does how much you contribute into a roth IRA, take that much away from your taxible income?
For example if I contribute $ 2000 into a roth IRA, and had a taxable income of $ 35,000 would it now be $ 33,000 of taxible income?

Best answer:

Answer by engineer50
No. Roth contributions are made with after-tax dollars. There is no deduction from income.

Give your answer to this question below!

]]> http://www.iraroth.net/2011/09/does-how-much-you-contribute-into-a-roth-ira-take-that-much-away-from-your-taxible-income/feed/ 2 Q&A: Can I contribute to individual roth ira and 401k roth ira at the same time ? http://www.iraroth.net/2011/08/qa-can-i-contribute-to-individual-roth-ira-and-401k-roth-ira-at-the-same-time/ http://www.iraroth.net/2011/08/qa-can-i-contribute-to-individual-roth-ira-and-401k-roth-ira-at-the-same-time/#comments Tue, 16 Aug 2011 18:44:24 +0000 admin http://www.iraroth.net/2011/08/qa-can-i-contribute-to-individual-roth-ira-and-401k-roth-ira-at-the-same-time/ Question by tax_question: Can I contribute to individual roth ira and 401k roth ira at the same time ?
I’ve contributed the maximum allowed for the 401k roth ira ($ 15500). Can I contribute another ($ 4500-$ 5500?) to an individual roth ira account? Or any other individual ira account in the same year?

Best answer:

Answer by QandA
Yes, I think the roth ira contribution is 4000. There is an income limit, so as long as you don’t make more than the limit you can

Know better? Leave your own answer in the comments!

]]> http://www.iraroth.net/2011/08/qa-can-i-contribute-to-individual-roth-ira-and-401k-roth-ira-at-the-same-time/feed/ 4 What are the tax implications for Canadians for 401k and ROTH IRA at retirement? http://www.iraroth.net/2011/08/what-are-the-tax-implications-for-canadians-for-401k-and-roth-ira-at-retirement-2/ http://www.iraroth.net/2011/08/what-are-the-tax-implications-for-canadians-for-401k-and-roth-ira-at-retirement-2/#comments Thu, 11 Aug 2011 00:07:52 +0000 admin http://www.iraroth.net/2011/08/what-are-the-tax-implications-for-canadians-for-401k-and-roth-ira-at-retirement-2/ Question by ajcolours: What are the tax implications for Canadians for 401k and ROTH IRA at retirement?
How do taxes work when Canadians who may have worked in the US withdraw money from their 401k or ROTH IRAs at retirement? Someone told me that a 401k can be withdrawn (and taxed in the US), but when the money is taken to Canada it will not be additionally taxed. However, the ROTH IRA would be taxed as new income in Canada. Is this true? If so, this defeats the whole purpose of the tax free growth provided by the ROTH IRA.

I am currently working in the US but am a Canadian Citizen and hence dont really know where i will be come retirement (40 years away) so I am not sure as to where I should invest. I am trying to collect details so I can make an informed decision.

Thanks
Mathew, I know how the taxes work if you remain in the US. I need to find how they work if you plan to take the money to Canada. Of course I dont know how things will work in 40 years, but how do they work now?

Best answer:

Answer by Mathew
For US taxes the 401 k disbursements will be taxed at your tax rate when you retire and the Roth disbursements will be tax free. Who knows what the Canadian tax rules will be in 40 years.

Give your answer to this question below!

]]> http://www.iraroth.net/2011/08/what-are-the-tax-implications-for-canadians-for-401k-and-roth-ira-at-retirement-2/feed/ 0