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Foreward

IRA stands for "Individual Retirement Account" and permits you and/or your spouse to invest pre-tax money on a tax deferred basis.

Providing you are not an active participant in a company sponsored pension plan, you may be able to take a full federal income tax deduction made to an IRA.

Who is Eligible

As long as you are under the age of 70   you meet the eligibility requirements to fund a tax deductible IRA account.

For tax year 2014 - ages 0-50: Your contribution is limited to $5,500 or 100% of your compensation whichever is less.

For tax year 2014 - ages 50 or older:   Your contribution limit is $6,500 or 100% of your compensation whichever is less.

For tax year 2015 - ages 0-50: Your contribution is limited to $5,500 or 100% of your compensation whichever is less.

For tax year 2015 - ages 50 or older:   Your contribution limit is $6,500 or 100% of your compensation whichever is less.

Prior to the enactment of the 1997 TRA, non-working spouses could only contribute $250 to an IRA account. Now, a non-working spouse may contribute normal amounts.  And effective in 1998, is able to receive a deduction on the contribution amount – even if the other spouse is participating in a qualified plan at work.

If neither spouse is participating in a tax qualified pension plan at work, the regular contributions for each may be fully tax-deductible.

However, as with many other tax-qualified plans, there are phase out reductions (based on MAGI) and other qualifications under IRA plans.

Tax Year Considerations

Contributions to an IRA can be made up until the tax-filing deadline (usually April 15th of each year) for the PREVIOUS tax year.

Distributions

Under current law, IRA distributions which are made prior to age 59 may be subject to a 10%, IRS-imposed tax penalty.  Consult your tax advisor.

At age 70 you must begin taking distributions from your IRA’s. Current law states that distribution is to occur April 1 of the calendar year following the year that you turn age 70 . The amount you must withdrawal is equal to the account value divided by the life expectancy of you or the combined lives (typically husband & wife) of the income beneficiaries.

However, effective January 2001, substantial changes have been made with respect to minimum distribution calculations.   Please consult your tax advisor.

Traditional IRA vs. Roth IRA

IRA’s are a very popular savings method.  However, the Roth IRA is an alternative that some investors might find more appealing.

One primary reason lies in the fact that although they forego the tax deduction, they gain tax-free distributions on the other end.


Action To Take

Click HERE to obtain IRA information

For Faster Service Call 1-800-480-7526


 

 

 


 

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Copyright 1998 Fielder Financial Management, LTD.
All Rights Reserved.

Securities and investment advisory services offered through Girard Securities, Inc. member FINRA, SIPC.
Fielder Financial Management, Ltd. not affiliated with Girard Securities, Inc.  Mark Fielder, OSJ, Registered Principal. CA. Insurance Lic. # 0690576.