Roth IRA, Traditional IRA, 401K » Roth 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.

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]]> 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.

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]]> 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…………..
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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.

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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: 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

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]]> 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.

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]]> http://www.iraroth.net/2011/08/what-are-the-tax-implications-for-canadians-for-401k-and-roth-ira-at-retirement-2/feed/ 0 Q&A: Why is there an upper income limit for contributing to a Roth IRA? http://www.iraroth.net/2011/08/qa-why-is-there-an-upper-income-limit-for-contributing-to-a-roth-ira/ http://www.iraroth.net/2011/08/qa-why-is-there-an-upper-income-limit-for-contributing-to-a-roth-ira/#comments Wed, 03 Aug 2011 00:19:18 +0000 admin http://www.iraroth.net/2011/08/qa-why-is-there-an-upper-income-limit-for-contributing-to-a-roth-ira/ Question by rainfingers: Why is there an upper income limit for contributing to a Roth IRA?
People over a certain income are not allowed to make any contributions to a Roth IRA. Why? Wouldn’t people with high income rather pay the taxes later anyway (as they would do with a traditional IRA)? In other words, doesn’t this rule just prohibit people from doing something they’d already rather not do?
Mrs. F: in addition to the upper income limit, there’s also a yearly contribution limit ($ 4000 this year). But Roth IRAs are still very, very, worth it! You can always put more money in next year, and the year after that, etc. Contribute the maximum, or as much as you can, every year; you’ll be glad later.

Best answer:

Answer by Mrs F
That doesn’t sound right. We were thinking of getting one of those sometime in the winter, but we should be able to contribute all we want!

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]]> http://www.iraroth.net/2011/08/qa-why-is-there-an-upper-income-limit-for-contributing-to-a-roth-ira/feed/ 2 Can I apply the basis on the regular ira to the converted 401k now that it’s an ira? http://www.iraroth.net/2011/06/can-i-apply-the-basis-on-the-regular-ira-to-the-converted-401k-now-that-its-an-ira/ http://www.iraroth.net/2011/06/can-i-apply-the-basis-on-the-regular-ira-to-the-converted-401k-now-that-its-an-ira/#comments Sun, 05 Jun 2011 16:36:10 +0000 admin http://www.iraroth.net/?p=495 I have a basis on a regular ira (A) and have converted a 401k into an another separate ira (B). I want to convert the former 401k (B) into a roth.
Can I apply the basis on the regular ira (A)to the converted 401k (B) now that it’s an ira?

]]> http://www.iraroth.net/2011/06/can-i-apply-the-basis-on-the-regular-ira-to-the-converted-401k-now-that-its-an-ira/feed/ 0 Should I close my Roth IRA and will I face a penalty? http://www.iraroth.net/2011/04/should-i-close-my-roth-ira-and-will-i-face-a-penalty/ http://www.iraroth.net/2011/04/should-i-close-my-roth-ira-and-will-i-face-a-penalty/#comments Tue, 26 Apr 2011 22:23:37 +0000 admin http://www.iraroth.net/2011/04/should-i-close-my-roth-ira-and-will-i-face-a-penalty/ Question by The Fervor King: Should I close my Roth IRA and will I face a penalty?
My wife’s parents opened a Roth IRA for her prior to us getting married. It has been opened around six months now. We are considering closing it to pay off her credit card and getting entirely debt free. Is there any sort of exception to the additional taxing on nonqualified disbursements that would apply to this situation? We have other investments in place, and this Roth IRA is really unnecessary. Any help would be greatly appreciated. Thanks.

Best answer:

Answer by Steve D
Sorry, but unless you can show hardship, there are no exemptions and you will end up paying the 10% penalty.

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