CRPC chap 4 and beyond Flashcards
who ca n have a deductible IRA
must have earned income or alimony from divorce settlements prior to 2019 and who are not active participants in employ sponsored qualified plan, sep or simple IRA can contribution 6k per year to deductible IRA regardless of AGI
individuals who receive earned income or alimony from divorce settlements prior to 2019 under designated AGI threshold and who are active participants in employer sponsored qualified retirement plan can contribute up to 6k per year to a deductible IRA
traditional IRA contribution limit and catch up
100% earned income up to 6k
1k catch up ifor age 50
Trad IRA excess contributions penalty
6% penalty tax
contribution deadline IRA
April 15- no extensions
IRA things you can’t invest in
loans?
insurance and collectibles
no loans
spousal IRA
spouse can make contributions from earnings to other spouse even if that other spouse is not working
what makes an active participant
for defined contribution plans- any annual additions which are employer contributions, employee contributions and forfeitures(investment earnings do no affect active participant status)
Defined benefit- if the employee is eligible to participate in plan. Even if they opt out
Trad IRA deduction phaseout amounts 2022
single taxpayer not active participant- can deduct entire amount
no phaseout- 68k-78k
married taxpayers filing jointly
neither is active participant- no phase out
no phaseout- active(109k-129k)
no phaseout- non active(204k-214k)
both active participants- 109k-129k
roth ira eligibility
earned income
no age limit on contributions and no rmd
noes not consider active participation status
roth IRA contribution 2021 phaseouts
single- 125k-140k
married, filing jointly- 198k-208k
roth ira good for who
modest income
has time
believes tax rates will increase or they will move to higher tax bracket
wants to avoid rmd
is saving for a first home
wants to pass tax free assets to beneficiaries
roth conversion?
ideal in low income years and expect future tax increase
income tax on conversion/no 10% penalty
pro rata taxation upon conversion
opportunity to improve tax diversification of portfolio
annuities 2 different periods
accumulation phase
distribution phase
accumulation phase types
immediate versus deferred
fixed versus variable
taxation of annuity income options (partial and lump sum
)
partial and lump sum distributions:LIFO
