IRAs Flashcards
IRA Contribution limits
Lesser of:
1) compensation received
2) $6,000 ($7,000 if 50+)
401(k) contribution limits
$19,500 ($26,000 if 50+)
415c contribution limits
$58,000 or 100% of compensation
(-additional $6,500 if 50+)
Simple IRA contribution limit
$13,500 (additional $3,000 if 50+)
SEP IRA contribution limits
25% of income with $58,000 cap
Spouse IRA limit
Lesser of:
1) Sum of compensation + taxable compensation of the spouse - spouses IRA contributions
2) $6,000 ($7,000)
IRA deduction phaseout if TP is covered by retirement plan
$66,000 - 76,000 - Single
$105,000 - 125,000 - MFJ
$0 - 10,000 - MFS
Formula for IRA phaseout
MAGI - Minimum phaseout amount
————————————————-
Max phaseout - min phaseout
Premature distribution penalty
10%
Penalty on excess contributions
6% excise tax
How to avoid penalties and taxes on IRA for excess contributions
Withdraw by due date (including extensions)
*interest is still subject to 10% tax for premature distribution
Mandatory distribution date & age & fee
72
April 1 following turning 72
50% tax
Amount to avoid tax from borrowing from plan
Lesser of:
1) $50,000
2) > of 1/2 PV of vested accrued benefit
Or $10,000
Must repay in 5 years unless for a principle residence
Roth IRA phaseout amounts
$125,000 - 140,000 - Single
$198,000 - 208,000 - MFJ
$0 - 10,000 - MFS
Roth IRA contribution limit
$6,000 ($7,000 if 50+)
