Questions tagged [ira]

In the United States, an IRA is an Individual Retirement Arrangement, a tax-deferred retirement account.

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My husband became a custodian on our son's 529 plan when my mother-in-law passed . Does the 15 year clock start all over again on IRA Conversion?

My mother-in-law opened an account for our son when he was very young. She died 10 years ago, and the change in custodian resulted in a new account registration. So, although the account looks like it ...
Rebecca Cuff's user avatar
3 votes
2 answers
76 views

IRA in a margin account

I understand that an IRA can't be held in a margin account, or at least margin can't be used. What I didn't know until recently is that the IRS can declare the entire account distributed if it's in a ...
Carey Gregory's user avatar
4 votes
2 answers
3k views

Move money from former employer's 401k to Roth IRA and Rollover IRA

I am no longer at my former employer but I have an existing 401k plan with Vanguard through them. 30% of the contributions were pre-tax. (traditional 401k) 70% of the contributions were post-tax. (...
Raj's user avatar
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1 answer
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SEP IRA eligibility criteria?

I am trying to determine if I can establish and contribute to a SEP IRA. Here are what I think to be the relevant details and questions. I receive a W-2 from my day job employer I have side income ...
pixelearth's user avatar
1 vote
1 answer
145 views

Why do people like Mega Backdoor Roth IRAs?

So, according to me: Traditional IRA: Money goes in tax-free Grows tax-free Taxed as ordinary income in retirement Roth IRA: Money goes in after-tax Grows tax-free Tax-free in retirement (These ...
Raj's user avatar
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2 votes
1 answer
226 views

What are "transactions and earnings" within the IRA?

I'm a European citizen who needs, for professional reasons, to understand in broad terms how the IRA works. I read the wikipedia page, and there is written that "all transactions and earnings ...
robertspierre's user avatar
3 votes
2 answers
103 views

Which of my tax-advantaged accounts should I hold my bond market index funds in?

I have traditional, Roth and SIMPLE IRAs. I'd like to get some total bond market index funds (VBTLX). In terms of taxes, gains, dividends, etc. is there any difference between holding the fund in a ...
pixelearth's user avatar
0 votes
2 answers
325 views

Can I take contributions out of traditional or roth 401(k) before 59 1/2 without penalty?

Can I take contributions out of a traditional or roth 401(k) before 59 1/2 without penalty? I'm basically looking for this table and cannot find it anywhere, please let me know if any of the below is ...
Katsu's user avatar
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1 answer
108 views

Successor beneficiary to inherited IRA - RMD calculation?

There are so many moving parts to this in the tax code... I keep thinking I understand it but now I'm not sure. My grandmother died in March 2017, age 93. She had been taking required distributions ...
Joe's user avatar
  • 115
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0 answers
240 views

Is this a viable strategy for avoiding the pro-rata rule for backdoor Roth while maintaining the superior investment options in my non-Roth IRA?

Assume that my 401(k) supports both reverse rollover from IRA and in-service rollover to an IRA. I am doing a backdoor Roth, and want to avoid the pro-rata rule. The general way to do this is to ...
asgallant's user avatar
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2 answers
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Interest accrued before backdoor roth ira conversion

What does one do with the interest accrued ( ~$1) in the money market account in the traditional IRA that shows up before doing the backdoor Roth IRA conversion? I noticed this amount and it puts me ...
heretoinfinity's user avatar
1 vote
0 answers
191 views

Is there any way to pay Vanguard account fees without it counting as an IRA contribution?

I have a small Vanguard traditional IRA that I maintain but don't contribute to. Because I want to continue to get paper statements, there is an account fee that I haven't paid for two years. ...
Jack's user avatar
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1 vote
2 answers
112 views

IRA withdraw penalties vs interest rates today

Here's a interesting point of view/question. With interest rates near 10% for loans these days - used car loans at 9.06% for someone with excellent credit - are we at a point where it makes more sense ...
user3260912's user avatar
3 votes
2 answers
145 views

Advice on 401k rollover to IRA

Basic question probably. I m looking for advice on rolling over a portion of amount in my 401k to an IRA. My needs are: a) to eliminate tax on withdrawal from IRA b) Have flexibility of withdrawal ...
SomeDude's user avatar
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2 votes
3 answers
1k views

Brokerage account vs Roth IRA

In a Roth IRA I can purchase up to $6500 dollars of funds per year. What would the difference be if I had a brokerage account and purchased the same funds? With a brokerage account I wouldn't have the ...
Rich's user avatar
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2 votes
1 answer
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IRA withdrawal for new construction home and 120-day rule

As per IRS Section 72(t)(2)(F) (paragraph (8)) one can withdraw up to $10,000 for a qualified first-time home purchase penalty-free. The withdrawn funds must be used within 120 days. If one is buying ...
Oleg Shirokikh's user avatar
0 votes
2 answers
232 views

Can an IRA contribution with after tax money be deductible?

I am trying to make an amendment for 2020 tax year. In December 2020 I contributed $6000 for Roth Ira and $6000 for traditional Ira (I did not know any better). I used after tax money in both ...
Rachid Brah's user avatar
1 vote
1 answer
95 views

Can a non-refundable tax credit be used to negate an early withdraw penalty from Traditional IRA?

I'm considering buying a new electric vehicle which would qualify for the US Federal Clean Vehicle Tax Credit. In theory, I could be eligible for up to a $7500 tax credit. My current paycheck tax ...
Mike B's user avatar
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1 vote
1 answer
297 views

What happens if Required Minimum Distributions (RMD) is not done or amount is wrong?

My wife inherited an IRA from her late mother.  At the time, wife was 66 and MIL was 88.  Another QA says RMD (for MIL) starts at 70½ but the manager of a different investment we have says it starts ...
WGroleau's user avatar
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Required minimum distribution (RMD) for inherited IRA—how long?

My wife inherited an IRA from her late mother.  At the time, wife was 66 and MIL was 88.  Another QA says RMD (for MIL) starts at 70½ but the manager of a different investment we have says it starts ...
WGroleau's user avatar
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New Secure 2.0 Act and Charitable Distributions re: Inherited IRAs

I understand that with the new SECURE 2.0 Act it is now possible for IRA holders to combine qualified charitable distributions (QCDs) with a charitable gift annuity vehicle. My question is if anyone ...
AA040371's user avatar
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1 vote
1 answer
92 views

What are the requirements for an older spouse to maintain the RMDs of a younger spouse that has deceased?

Let's say Alice is 78 and Bob is 74, so both are already taking RMDs, and are married. Bob dies, and Alice becomes the owner of Bob's IRA. According to the IRS here, Alice can continue taking Bob's ...
Craig W's user avatar
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Should I sell off my Traditional IRA holdings in the first year I stop working after 60?

Just to experiment with Roth IRA and Traditional IRA, I do have both. I have some holdings in Traditional IRA, but they are more like US$1000 and a few hundred dollars in some other firms. So let's ...
Stefanie Gauss's user avatar
1 vote
1 answer
95 views

Considering current market situation is it wise to convert 401K account into IRA

This is what I know about 401k and IRA accounts: 401k accounts are employer-sponsored plans, which means that you can only participate in a 401k plan if your employer offers one. IRAs, on the other ...
OpenStack's user avatar
  • 127
7 votes
2 answers
3k views

I would like to donate my IRA to a certain charity. Will that charity be able to withdraw the money from the IRA tax free?

I don't want to withdraw and pay taxes on the cash in the IRA for obvious reasons. Hopefully the face value of the IRA will be the amount I can count as a charitable gift, but I'm more concerned with ...
Dahere's user avatar
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0 answers
47 views

Is using IRA, Roth IRA, and 401k money between the age of 62 to 70 in general a better choice than claiming social security? [duplicate]

My thinking this: if I don't use IRA, Roth IRA, or 401k money between the age of 62 and 70, but just let it grow, then let's say, if it was $500k at age 62, then if I am lucky to get 10% return per ...
Stefanie Gauss's user avatar
12 votes
5 answers
8k views

My employers "401(k) contribution" is cash, not an actual retirement account. What are my options?

I just took a job that I like, and the line in the offer letter turns out to be misleading (I think through inexperience, not manipulation). This is it: You will eligible to receive a 401(k) match of ...
pixelearth's user avatar
0 votes
1 answer
228 views

US rollover IRA for non-resident alien

I am not a US citizen, and I am currently not resident in the US. I lived and worked in the US between 2014 and 2016 and I have a 401(k) from that time. The 401(k) plan is being terminated and I am ...
Tom's user avatar
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8 votes
1 answer
1k views

Inherited Retirement (IRA) Account (non-spouse)

When my mother passed she left an IRA account that got split up among the kids. I just read an article with the sentence: "If you leave retirement money to your kids or anyone other than your ...
AA040371's user avatar
  • 321
1 vote
1 answer
70 views

Under what circumstances could an employee be able to have company provided 401k tax deductible and Trad IRA

Tax software is stating that I am able to take Trad IRA with deduction. This seems odd as I contributed max amount to employer provided 401k. I was under the impression that fully contributing to 401k ...
paulj's user avatar
  • 1,109
0 votes
0 answers
30 views

Unrelated Business Taxable Income (UBTI) exceeding limit in IRA

I've kept an MLP stock in an IRA for several years not wanting to deal with the K-1 tax complexities. However it looks like this year my Unrelated Business Taxable Income (UBTI) will exceed the $1000 ...
public wireless's user avatar
5 votes
1 answer
997 views

Converted Traditional IRA to Roth IRA (backdoor) with money market funds, is that a mistake?

During last year (2022), I wanted to do a typical backdoor Roth IRA. I made a full $6,000 post-tax contribution to my Traditional IRA, waited for the transfer to settle, and then immediately converted ...
Brian's user avatar
  • 153
5 votes
1 answer
829 views

How can I withdraw money from Inherited IRA and credit it to last year?

I'm in a situation where I have a significant amount of money in an IRA that I need to withdraw over the next several years and I want to minimize the tax penalty. I have some leftover tax credits and ...
BWhite's user avatar
  • 161
2 votes
2 answers
180 views

What are the pros and cons of using an IRA distribution as a bridge loan when selling and buying a house?

I'm planning to move to a different region in the US on a tight schedule. I have enough equity in my current primary residence to pay for a down payment on a new home, but since I'm on a tight ...
Roy Tinker's user avatar
2 votes
2 answers
101 views

Convert Traditional IRA into Roth after deduction submitted to IRS

I recently opened a new traditional IRA account and deposited the maximum contribution for last year (2022 - 6k). Since my 2022 MAGI was low enough (<144k as single), I then amended my already ...
Michele's user avatar
  • 35
5 votes
1 answer
428 views

Does the pro rate rule on taxes for backdoor Roth IRA conversion apply if you have multiple Roth NOT traditional IRAs?

This is a follow up of the question here about rolling over traditional IRAs to 401k. The pro rata rule looks at the amounts in all your traditional IRAs when you do a backdoor Roth conversion. Does ...
heretoinfinity's user avatar
5 votes
1 answer
218 views

IRA to HSA transfer - do the funding limits apply?

A person has $60,000 in his traditional IRA with a cost basis of 0. He has the right kind of health insurance. Can he do a one time transfer of the $60,000 to his HSA? That is, do the normal HSA ...
Bob's user avatar
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-1 votes
2 answers
273 views

I earn $1 more and now my Roth IRA is "illegal" or "invalid" in the US? [duplicate]

Because my 401k is limited to a list of about 30 items, I can't buy what I want, such as QQQ or Apple or Google stocks. So the only way for me is to invest in Roth IRA. However, there is this rule: ...
Stefanie Gauss's user avatar
5 votes
2 answers
1k views

Can I move monthly pension distributions into a traditional IRA?

As a former public school teacher, my wife gets a monthly check from the state Division of Pensions and Benefits. Is it possible to move that money each month into her Traditional IRA and consider it ...
Daniel Goldfarb's user avatar
3 votes
2 answers
188 views

Do withdrawals from an inherited IRA count towards the earned income tax credit?

The question says it all. Do withdrawals from an inherited IRA count towards the earned income tax credit?
user5389726598465's user avatar
2 votes
3 answers
135 views

What are the reasons to avoid rolling over IRA into 401k plans?

Are there reasons for and against doing this? For I can only think of having more options for what securities to buy in IRAs since 401k options are limited. Against The only reason to do the IRA ...
heretoinfinity's user avatar
3 votes
1 answer
337 views

Contribution limit differences between 401k and IRAs

Is there a reason why the contribution limits of these are drastically different with the 401k limits being about three times higher? Moreover, why is it that the 401k limits go up over the years but ...
heretoinfinity's user avatar
2 votes
1 answer
184 views

In the US, if I am afraid my income may be over $153,000 for Roth IRA, is it true I can do the IRA backdoor?

I saw on the Robinhood website that they do IRA and Roth IRA now, and they have a 1% matching, but it says for the Roth IRA qualification for year 2023: Anyone with a MAGI (modified adjusted gross ...
Stefanie Gauss's user avatar
1 vote
2 answers
46 views

Investing max tax-deferred IRA contribution Dec 2022 vs Jan 2023 for contribution year 2022

If contributing for tax year 2022 into a tax-advantaged IRA ETF, is there any benefit waiting until Jan 2023 vs Dec 2022? I am remembering something that happens at end of year with ETFs?
paulj's user avatar
  • 1,109
4 votes
3 answers
1k views

How to tell how much of my traditional IRA is pre-tax versus after-tax?

You can convert to a traditional IRA pre-tax or after-tax. All the sites I've found assume you know how much of each happened. I've been contributing for decades, across several employers, rollovers,...
dfrankow's user avatar
  • 637
2 votes
1 answer
108 views

Convert Trad to Roth IRA during tax year with capital gains losses

I generally prefer to have my retirement savings in a Roth IRA rather than a traditional IRA, so that my returns earn money tax-free. I have a lot of savings in a traditional IRA that I'd like to ...
canary_in_the_data_mine's user avatar
6 votes
3 answers
1k views

Financial efficiency - purchasing a car with cash from retirement withdrawal vs. by financing

When someone in their retirement is purchasing a car, is it financially more efficient for them to take a lump sum of cash out of a deferred-tax retirement account (and pay income tax on it), or is it ...
Keith's user avatar
  • 195
1 vote
0 answers
89 views

Do I need to file 8606 amendment to correct "total basis in traditional IRAs" value?

Form 8606 line 2: Enter your total basis in traditional IRAs. See instructions . This value was entered as 0 but it should not be. Otherwise, everything else is same. Do I need to file form 8606 ...
javanoob's user avatar
  • 285
3 votes
3 answers
476 views

If form 8606 is not required to submit for just Roth IRA contributions? How does IRS enforce the limit?

If someone is qualified to contribute the full amount($6,000) to Roth IRA, they are not required to file form 8606.Is that right? If yes to above question(meaning not required to file 8606), how will ...
javanoob's user avatar
  • 285
1 vote
1 answer
30 views

Question on filing form 8606 for tax year 2020

I am filling form 8606 for tax year 2020 and have below question: Line 8: Enter the net amount you converted from traditional, SEP, and SIMPLE IRAs to Roth IRAs in 2020. Also, enter this amount on ...
javanoob's user avatar
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