Roth IRA, Traditional IRA, 401K » from 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 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 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.

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]]> 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: In my case, can I take the owed taxes from the Roth IRA to pay the taxes due without incurring penalties, etc? http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/#comments Mon, 21 Mar 2011 22:24:05 +0000 admin http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/ Question by Sterling J: In my case, can I take the owed taxes from the Roth IRA to pay the taxes due without incurring penalties, etc?
I converted a Traditional IRA to a Roth IRA. The federal taxes were withheld – all is well with that (I think). The state taxes were not withheld. Now I owe the state a bunch of money. Can I take the owed amount (or less) from the Roth IRA to pay the taxes due without incurring penalties, etc? Would this be considered a “premature withdrawal”?

Best answer:

Answer by chatsplas@sbcglobal.net
Don’t do it.
Yes it would be premature withdrawal.
You know you can undo the conversion? And convert part of the money this year and part next year. Up to 4/15 you can.

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]]> http://www.iraroth.net/2011/03/qa-in-my-case-can-i-take-the-owed-taxes-from-the-roth-ira-to-pay-the-taxes-due-without-incurring-penalties-etc/feed/ 2 Q&A: When I change my IRA to a ROTH IRA can I pay the taxes from the IRA? http://www.iraroth.net/2011/03/qa-when-i-change-my-ira-to-a-roth-ira-can-i-pay-the-taxes-from-the-ira/ http://www.iraroth.net/2011/03/qa-when-i-change-my-ira-to-a-roth-ira-can-i-pay-the-taxes-from-the-ira/#comments Thu, 17 Mar 2011 22:25:15 +0000 admin http://www.iraroth.net/2011/03/qa-when-i-change-my-ira-to-a-roth-ira-can-i-pay-the-taxes-from-the-ira/ Question by barry b: When I change my IRA to a ROTH IRA can I pay the taxes from the IRA?
I am retired and want to change my ira to a roth ira so I don’t have to worry about future taxes from the roth ira.
what are the rules of the roth ira?

Best answer:

Answer by Scott
It the same rules as for an IRA. The difference is on the withdrawal. Roth’s you have already paid them and for a standard IRA you have not. So on each payment from an IRA you will owe taxes. On a Roth each payment will be tax exempt.

Yes, you can have them withhold the taxes from the amount being rolled over. Just tell them what percentage to withhold (min 10%).

Not sure why you want to pay a lump sum to the IRS at this point? Are you expecting large gains from the market????

What do you think? Answer below!

]]> http://www.iraroth.net/2011/03/qa-when-i-change-my-ira-to-a-roth-ira-can-i-pay-the-taxes-from-the-ira/feed/ 0 When I withdraw money from my Roth IRA, do I have to deduct Federal or State taxes? http://www.iraroth.net/2011/03/when-i-withdraw-money-from-my-roth-ira-do-i-have-to-deduct-federal-or-state-taxes-2/ http://www.iraroth.net/2011/03/when-i-withdraw-money-from-my-roth-ira-do-i-have-to-deduct-federal-or-state-taxes-2/#comments Sat, 05 Mar 2011 22:25:46 +0000 admin http://www.iraroth.net/2011/03/when-i-withdraw-money-from-my-roth-ira-do-i-have-to-deduct-federal-or-state-taxes-2/ Question by rdimonte: When I withdraw money from my Roth IRA, do I have to deduct Federal or State taxes?
I rolled over a rollover IRA into a Roth, which is now called a Roth IRA. When filing tax return, I had to pay Federal taxes on the whole amount that was rolled over. When I withdraw from my Roth IRA in the future, do I deduct Federal & State taxes from the amount that I am withdrawing, & if so, what percentage do I use. Will I get taxed on the amount of money that I withdraw, when I file next year’s taxes?

Best answer:

Answer by singlegal
The year in which you transfer/roll the IRA into a Roth IRA is the year you pay state and federal taxes. Once the $ is in the Roth you never pay state or federal taxes on that money again no matter how much it grows………….. hmmmm…. unless the govt. changes the rules down the road…. but for now…. No. You don’t pay again no matter how much the money “grows.”

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]]> http://www.iraroth.net/2011/03/when-i-withdraw-money-from-my-roth-ira-do-i-have-to-deduct-federal-or-state-taxes-2/feed/ 0 Can I xfer money from 401k with present employer to a IRA while still contributing to 401k? http://www.iraroth.net/2010/07/can-i-xfer-money-from-401k-with-present-employer-to-a-ira-while-still-contributing-to-401k/ http://www.iraroth.net/2010/07/can-i-xfer-money-from-401k-with-present-employer-to-a-ira-while-still-contributing-to-401k/#comments Fri, 30 Jul 2010 23:36:21 +0000 admin http://www.iraroth.net/2010/07/can-i-xfer-money-from-401k-with-present-employer-to-a-ira-while-still-contributing-to-401k/ I am currently contributing to my 401k plan at my present job. I don’t like the choices they give me and the brokerage plan charges $18 per trade and $100 a year maintenance fee. Can I continue to fund the 401k plan and transfer the moneys to a Roth IRA or similar plan at another brokerage?

]]> http://www.iraroth.net/2010/07/can-i-xfer-money-from-401k-with-present-employer-to-a-ira-while-still-contributing-to-401k/feed/ 2 Can you avoid 10% penalty on w/d from Traditional IRAs by doing this? http://www.iraroth.net/2010/05/can-you-avoid-10-penalty-on-wd-from-traditional-iras-by-doing-this/ http://www.iraroth.net/2010/05/can-you-avoid-10-penalty-on-wd-from-traditional-iras-by-doing-this/#comments Mon, 10 May 2010 23:11:19 +0000 admin http://www.iraroth.net/2010/05/can-you-avoid-10-penalty-on-wd-from-traditional-iras-by-doing-this/ if someone under age 59 1/2 wants to take money out of a Traditional IRA, they would have to pay a 10 % penalty and taxes. But what if they converted the Traditional IRA to a Roth IRA first? (and they can maybe convert only the amount they need). Then – as I understand Roth IRAs – there is no 10% penalty to withdraw from a Roth. Is this true?
Also, Can you w/d from a Roth anytime without incurring or do you have to wait 5 years after conversion?

]]> http://www.iraroth.net/2010/05/can-you-avoid-10-penalty-on-wd-from-traditional-iras-by-doing-this/feed/ 4 Are our IRAs safe from confiscation in an Obama administration? http://www.iraroth.net/2010/04/are-our-iras-safe-from-confiscation-in-an-obama-administration/ http://www.iraroth.net/2010/04/are-our-iras-safe-from-confiscation-in-an-obama-administration/#comments Sat, 24 Apr 2010 19:22:50 +0000 admin http://www.iraroth.net/2010/04/are-our-iras-safe-from-confiscation-in-an-obama-administration/ Before you dems get too riled up, consider: FDR confiscated gold during the depression. He paid people with US dollars, which he promptly devalued:

http://www.fgmr.com/confiscation.htm

Facing a worsening liquidity crisis, do you worry that Obama would confiscate our retirement accounts, giving us a devalued promissory note in return?

]]> http://www.iraroth.net/2010/04/are-our-iras-safe-from-confiscation-in-an-obama-administration/feed/ 18 What if withdrawals from IRAs and 401Ks were made TAX EXEMPT and fee free temporarily to help the economy? http://www.iraroth.net/2010/04/what-if-withdrawals-from-iras-and-401ks-were-made-tax-exempt-and-fee-free-temporarily-to-help-the-economy/ http://www.iraroth.net/2010/04/what-if-withdrawals-from-iras-and-401ks-were-made-tax-exempt-and-fee-free-temporarily-to-help-the-economy/#comments Mon, 12 Apr 2010 16:23:45 +0000 admin http://www.iraroth.net/2010/04/what-if-withdrawals-from-iras-and-401ks-were-made-tax-exempt-and-fee-free-temporarily-to-help-the-economy/ Then people could use their own money to make ends meet, cover expenses after unemployment runs out or transfer funds from losing mutual funds to pay down high interest credit cards and 2nd mortgages.

They always talk about our money… we’ll it’s mine and I need it NOW!!!

Yes, I know this would be like a run on the bank, but they don’t deserve to be trusted with our savings any more !!!!!!!!!!!!!!!!

]]> http://www.iraroth.net/2010/04/what-if-withdrawals-from-iras-and-401ks-were-made-tax-exempt-and-fee-free-temporarily-to-help-the-economy/feed/ 5 Is it possible to withdraw 5K from 2 separate IRA accounts for 1st time home buying ? http://www.iraroth.net/2010/04/can-i-do-5k-withdrawal-from-2-separate-iras-for-1st-time-home-buying/ http://www.iraroth.net/2010/04/can-i-do-5k-withdrawal-from-2-separate-iras-for-1st-time-home-buying/#comments Fri, 09 Apr 2010 19:23:55 +0000 admin http://www.iraroth.net/2010/04/can-i-do-5k-withdrawal-from-2-separate-iras-for-1st-time-home-buying/ I have two different IRA accounts with over 5K in each one. Is it possible for me to withdraw $5K from each account or should I consolidate them first then withdraw $10K ?

]]> http://www.iraroth.net/2010/04/can-i-do-5k-withdrawal-from-2-separate-iras-for-1st-time-home-buying/feed/ 1