Question by ScubaS: What happens to a Roth IRA when you make too much money?
I understand the difference between a Roth and Traditional IRA, but I haven’t found any information on this technicality.
Let’s say I open a Roth IRA because I don’t have enough income to make me exempt. Then I start making more money and open a Traditional IRA. What happens to the money in the Roth IRA? Can I keep investing with it capital gains tax free, or does it roll into the Trad IRA? What are the tax consequences?
Thanks for your help.
Best answer:
Answer by v b
Nothingyou say makes any sense.
If you have less than $ 5000 of income, yeah, it would better to put the income into a Roth than a traditional IRA because a deduction would be worthless to you.
If in a following year you have, say, $ 20,000 of income, then yes you can ALSO open a tradtional IRA, put the money in there and take a deduction.
The issue is that you have 2 accounts. The $ 5000 you put in can go into 1, the other, or any combination as long as the total is not more than $ 5000.
The Roth continues, you hope to grow. (By the way, IRAs of all flavors do not have ‘captial gains’–if they are taxed, it’s ordinary.)
What do you think? Answer below!
Since there are a lot of possible variables, here’s my situation. I’m not planning on dying, just trying to figure how much life insurance I should have and what I can do ahead of time.
Single. Live with both parents. No dependents.
10k student loans
10k ING savings
10k stocks
2k IRA
2k credit card debt
4k car in my name
So far I’ve learned on Sallie Mae.com that student loans are eligible for discharge upon death. Good reason not to pay them off when you have a nice 3% interest rate.
Now, I’d like my parents to be able to just take my car, savings/checking accounts (they have the same bank), Roth IRA, and stocks in the event of my death. How can I allow them to do that?
Which of my debts become null? And what accounts can they claim without any effort? What can I do to make things easier for them? Also, how do taxes come into effect.
I hope others may find your answers useful as well.
Sallie Mae website about loan discharge.
http://www.salliemae.com/after_graduation/manage_your_loans/borrower_responsibility/understanding/discharge.htm
What happens if you exceed the income limits of a roth IRA after years of contributing to it? Can you convert it to traditional? how does this work with taxes?
n? Some of the stocks had dividends, some had profits, some losses? So how is the tax computed on the payouts? Is there anything I should be doing with this traditional IRA account to make sure that expenses and losses are taken into account correctly?
I understand the difference between a Roth and Traditional IRA, but I haven’t found any information on this technicality.
Let’s say I open a Roth IRA because I don’t have enough income to make me exempt. Then I start making more money and open a Traditional IRA. What happens to the money in the Roth IRA? Can I keep investing with it capital gains tax free, or does it roll into the Trad IRA? What are the tax consequences?
Thanks for your help.
What happens to my 401k plan if I decide to leave USA and go back to Indonesia. I have my 401k plan for about 5 yrs. What are the consequences and how should I save from getting penalised ? I am resident in USA and 35 yrs of age.
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