Saturday, September
4 2010
|
|
|
|
|
|
|
|
|
|
Saturday, September
4 2010
|
|
||||||
|
|
|
|
|||||
|
|
|
|
|
||||
|
| |||||||||||||||
|
Announcing a new acquisition!!
|
What's New at Forte for the year 2007 December 2007B - Try and Avoid These Stupid IRA Mistakes By Forte News Department Fortunately,
Dec. 31 is not the final decision date for what we do with our individual
retirement accounts – the final 2007 IRA contribution deadline comes on April
15 next year – but it’s a good time to review the do’s and don’ts of successful
IRA management. Mistake No. 1 – Failure to start: Do you have either a traditional or
Roth IRA as part of your retirement strategy? If not, get some advice – a
Certified Financial Planner™ professional is a good start – to review your
overall retirement options and give you some ideas where to start. Mistake No. 2 – Not comparing the
advantages of traditional IRAs and Roth IRAs: The biggest differences between a
traditional IRA and a Roth is the way Uncle Sam treats taxes on both types of
IRA investments. If you put money in a traditional IRA, you’ll be able to
deduct that contribution on your income taxes. In a Roth, you don’t receive the
tax deduction for those contributions, but when it’s time to take the money
out, you won’t have to pay taxes on it.
Mistake No. 3 – Forgetting income
limits for a Roth IRA: The income limits for establishing a Roth are as follows: for a married
couple filing jointly or a qualified surviving spouse, you can’t contribute if
your modified adjusted gross income exceeds $166,000; if you’re filing single,
you can’t contribute if your modified AGI exceeds $114,000, and for married people
filing separately, you can’t contribute if your modified AGI exceeds $10,000.
If you exceed those income limits and make a deposit, you might be subject to a
penalty. Mistake No. 4 – Failing to make sure
your beneficiaries are correct: Starting in 2007, a direct transfer from a deceased
employee’s IRA, qualified pension, profit-sharing or stock bonus plan, annuity
plan, tax-sheltered annuity, 403(b) plan or a governmental deferred
compensation plan to any qualified IRA can be treated as an eligible rollover
distribution if the beneficiary is not the deceased’s spouse. That means your
kids or any other designated recipient can inherit your IRAs without negative
tax consequences at that time. Non-spouse beneficiaries need to check with a
tax expert when they must begin distributions from an inherited IRA. Of course,
no matter what the investment, make sure your beneficiaries are always current. Mistake No. 5 – Not knowing the
maximum contribution:
For both traditional and Roth IRAs, the maximum annual contribution for 2007 is
$4,000 unless you are age 50 or older, when you can add an additional $1,000 to
that total. But review the income limits for contributions as you go. Mistake No. 6 – Frittering away your
tax refund: Did you
know you could deposit your tax refund directly into your IRA? It works for a
health or education savings account as well. While many people use their tax
refund as a bonus to buy a treat or pay off bills, consider filing your taxes a
bit early and arrange to e-file a direct deposit to your IRA so you can note
that deposit for the 2007 tax year by next April 15. Mistake No. 7 – Forgetting
retirement savings benefits for active military personnel: The 2006 Heroes Earned Retirement
Opportunities (HERO) Act allows active military personnel and their families to
put a potentially greater contribution toward their traditional or Roth IRA
accounts. The act allows tax-free combat pay to be considered as earned income
to determine the contribution amount for traditional and Roth IRAs – it hadn’t
before. Before, a military person who earned only combat pay wasn’t allowed to
contribute to either form of IRA. This
change is retroactive to 2004 and affected military personnel have until May
28, 2009 to make their contribution, though amended returns may be filed. Mistake No. 8 – Withdrawing money
early from an IRA of blowing a rollover:
Money taken
out of an IRA is subject to income taxes and a penalty if you are under 59 ½
years old and do not put it back into an IRA within 60 days. When moving assets, most of the time a
trustee-to-trustee transfer can be more efficient and with less margin for
error. If the IRA distribution check is
made payable to you, there is a greater chance you’ll miss the 60-day deadline
and you’ll face taxes and penalties. December 2007 — This column is
produced by the Financial Planning Association, the membership organization for
the financial planning community, and is provided by David W. Henion, a local
member of FPA. | ||||||||||||||
|
Copyright
© Forte´ Capital LLC. Do not duplicate
or redistribute the content of this website. |
||||||||