Retirement/Education/Health Savings Plans Flashcards
Tax qualified plans vs non-tax qualified
tax qualified plan contributions are deductible against income, non-qualified are not; non-tax qualified distributions not fully taxable - orginal contribution amount not taxed
Max contribution to IRA
$5,500 or 100% of income (lesser of two)
How much extra “catch-up” money can taxpayers age 50 and older put into an IRA?
$1000
Are high-earners contributions still deductible?
Yes if not covered by another retirement plan
No if hit phase out limits for income and are covered
How long can contributions continue?
70 1/2
How long does a person have to rollover a retirement account into an IRA?
60 days from plan termination
When does an IRA payout have to begin?
April 1st of the year following the year of reaching 70 1/2
What happens when an IRA owner dies?
beneficiary must start taking proceeds over the longer of 5 years or beneficiary’s life
What special option do spouses have if they inherit an IRA?
Roll over into their own IRA account; don’t have to take distributions until age 70 1/2
What 3 options do non-spouse beneficiaries have if they inherit an IRA?
Beneficiary distribution account - essentially inherit the IRA and start taking distributions immediately
Cashout
Disclaim - give to someone else
what retirement plan exists for self-employed individuals?
Keogh plan (HR 10)
Maximum Keogh contribution?
25% of after deduction earnings (translates to 20% effective rate)
Capped at $53000
If an employer earns $265000 and contributes the maximum to their own plan, how much must they give employees?
25% of income
Max contribution to 401(k) plan?
$18,000
Maximum contribution to a coverdell account?
$2000
