Archive for IRA – Page 2

Can I use my 401 K to purchase things for my bsns without paying taxes on the mony?

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Saturday, August 20th, 2011

I need to purchase some key items for my start up bsns. Can I use 401 k funds with out getting hit for the full taxes? Can I borrow against a 401K for my business?

If it is a current employer, you are unlikely to be able to remove anything from it (unless older that what the plan considers retirement age). If they allow 401K loans it is usually only for very limited purposes (see details of your specific plan).

If it is from a former employer, you cannot borrow from it, and anything you take out of it would be included with other income for tax purposes (plus 10% penalty if under age 59.5).

Give it up. you are not going to be able to use anything from your IRA or 401K towards a business without income tax and possible 10% penalty. and you cannot buy anything within such accounts that you or your family uses or has direct control over.

if you are still employed with the company that you had the 401(K) with you might be able to borrow the money against it
but if you no longer work for that company and your start up business is your only employment, no, you cannot borrow on the 401(K)

No.

No matter what you use the money for, it's taxable income to you if you take a distribution. It's also subject to the 10% penalty unless an exception applies.

If you take a loan (assuming they will let you), it's not taxable as long as you successfully pay the loan back.

If you take a loan against your 401K and pay it back as scheduled, there's no tax.

If you withdraw money, or take a loan and don't pay it back on schedule, it's taxable.

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Categories : 401 k
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What's a good company to rollover my 401k benefits?

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Tuesday, August 16th, 2011

I switched jobs and now my present job has a 401k plan but it doesn't match until after 4yrs.Not sure if i should rollover to this or research a different company. I'm new @ this and need some great advice.

Be careful. If you roll it into an IRA and then contribute to it, you wont be able to roll it over into a 401k in the future.

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Categories : 401k rollover
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Can $12000 per year per child be gifted without inheritance tax even if the money comes from an IRA or 401k?

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Saturday, August 13th, 2011

The gift giver is 67 years old with 401k and IRA. The receivers are her children. what kind of taxes can be avoided, and which still must be incurred, and at what rate then?

Thanks so much.

You will have to take a distribution from your IRA or 401k before you give it to anyone. When you take the distribution, it is taxable income to you, at your current tax rate. The fact that you are giving it to someone does not change the income tax you have to pay.

If you give $12,000 or more in one year to an individual, you will have to file a gift tax return. however, you will not owe any gift tax until your lifetime gifts as reported on your gift tax returns exceed $1 million dollars.

If you bequeath your 401k or IRA to your children, when they take distributions, they will pay income taxes at their current tax rates.

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Categories : ira or 401k
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How do Roth IRAs work? Do they really double everything every year?

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Friday, August 5th, 2011

they definitely don't double every year. it is a retirement plan that has taxes taken out, that way when you retire whatever money it has earned is yours, tax free because the taxes are taken out in the beginning. Something like that, I'm not too familiar with IRAs..they are a confusing subject!

Certainly not. where did you get that idea? see ira.com.

I my case, I have invested the maximum amount the government allows each year starting in Dec of 1999. its invested in a mutual fund. I dollar cost average and even though it has not paid a dividend since Dec 1999, I have made money since a lot of shares were purchased at about 23 dollars per share and are now worth twice that. My shares our currently worth just under 30 thousand. not nearly enough to retire on. take my advice, start planning for your retirement while your still young.

no they do not double but it is a way to earn unearned nontaxable income!!!

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Categories : roth iras
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Recharacterization costing me tax dollars?

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Thursday, July 28th, 2011

Can you help me and I'm sure others. I rolled over approx 40,000 to my roth from my taxable ira. The crash then reduced my total roth by over 50 per cent. thus when Schwab recharacterized me back 2 months later the recharacterized amount approximated 20,000. If I'm correct my 1099 at the end of the year will show 40,000 as a rollover and 20,000 for the recharacterized amount. Resulting in me having to pay tax on 20,000. Is this correct? Dennis

If you recharacterized the whole thing, you did a do-over on the whole thing. thus you won't pay taxes because you never officially rolled anything over.

fairmark.com/rothira/recon.ht…

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Categories : roth ira recharacterization
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What are my retirement combination limits?

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Wednesday, July 13th, 2011

My company states that the IRS limits the dollar amount an employee can contribute on a combined standard before-tax and Roth 401(k) basis. For calendar year 2008, the limit is $15,500. I believe that means that both 401k and Roth 401k contributions through my employer are limited to $15,500 for the year.

Can I contribute the maximum $15,500 and the open an IRA and contribute the $5000 maxium there too? The would be a total of $20,500 per year.

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Categories : roth limits
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How to determine proper amount for IRA->Roth conversion for 2008?

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Sunday, July 10th, 2011

Hi,

I need to find out 1. whether my wife and I are qualitifed for IRA->Roth conversion this year (2008) and 2. what amounts are proper for such conversion, if we are qualified. any suggestion or referer to a consultant will be greatly appreciated.

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Categories : ira conversion to roth ira
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In 2009 tax rules, If I did not take RMD from my IRA and 401k in 2009, do I have to take twice in 2010?

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Thursday, July 7th, 2011

In 2009 I did not have to take my normal Required Minimum Distribution from my IRA or 401k. I did neither. In 2010 do I have to make up for that by taking twice the normal distribution from both accounts?

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Categories : ira rules
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Received my 401k rollover check in the mail addressed to Fidelity FBO my name. Can I put it in my savings?

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Tuesday, July 5th, 2011

The check is made to Fidelity FBO my name.

If you could you should change banks immediately….as it would be easy to have your account fraudulently drained at that bank since they cash checks not even made out to the person cashing them.

As you said, the check is not made out to you. It's made out to Fidelity. The FBO simply gives Fidelity an added clue whose account to put it into if the memo section is not completed. so no, you can't (or shouldn't be able to) cash it.

No. you told the 401K folks that you were rolling it over to a new custodian so they didn't withhold any taxes or money for penalties.

FBO = for benefit of.
You have to turn the check into Fidelity.

After you've set up the IRA, you can tell Fidelity that you want to pull the money out–and they'll withhold 20% towards taxes/penalty and issue you the appropriate 1099-R.

If you put it into your savings, you will have to pay tax on all of it plus a 10% penalty. If it is a rollover check, it has to go into an approved retirement account to keep from having to pay tax on it.

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Categories : 401k rollovers
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Is my former employer required to contribute to my SEP IRA for 2008 if I didn't work for them all year?

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Monday, July 4th, 2011

I worked for the same employer from 2001 until April of 2008. I received contributions to a SEP IRA for 2004-2007. I have not received anything for 2008. it was my understanding that there can be no last day of the year employment requirement and I am therefore considered an eligible employee. Is that true? Am I still due a contribution for 2008?

clear all doubts visit this website taxlogic.blogspot.com

The company can have their own qualifications, such as how long you worked there in any year, or if you were or were not an employee at the end of the year. If you wish to pursue the matter, you should ask the company what their criteria is for employer contributions to an employees SEP IRA, specifically how long you have to work there in any particular year.

Good question. I'd say yes!

Eligible Employee – an eligible employee is an employee who is at least 21 years of age, and has performed service for the employer in at least 3 of the last 5 years.

All eligible employees must participate in the plan, including part-time employees, seasonal employees, and employees who die or terminate employment during the year.

A SEP may also cover the following employees, but there is no requirement to cover them:
1. Employees covered by a union contract;
2. Nonresident alien employees who did not earn income from the employer;
3. Employees who received less than $500 in compensation during the year (subject to cost-of-living adjustments).

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Categories : sep ira
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