Nexus Financial Management Explains How High Income Taxpayers Can Take Advantage of a Roth IRA
Jacksonville, FL (ContentDesk via ContentDesk Direct) July 17, 2006 -- The Tax Increase Prevention and Reconciliation Act (TIPRA) recently signed by President Bush eliminates the $100,000 Modified Adjusted Gross Income (MAGI) ceiling and the married taxpayer joint filing requirement for converting a traditional IRA into a Roth IRA, but not until the year 2010. All other rules continue to apply, which means that the amount converted to a Roth IRA will still be taxed as income at the individuals highest tax rate. Under current law, single taxpayers with MAGI of more than $110,000 cannot contribute to a Roth IRA; or married taxpayers with joint income in excess of $160,000. However, by eliminating the income ceiling for conversions, the income limits on contributing to a Roth IRA have essentially been removed as well. In 2006 and 2007, individuals can contribute up to $4,000 per year to a nondeductible traditional IRA ($5,000 if age 50 or older but under 70 1/2).
In years 2008 2010, the amounts increase to $5,000 per year ($6,000 for investors age 50 or older but under 70 1/2). As a result, individuals under age 50 can contribute up to $23,000 during that five year stretch or up to $28,000 if 50 or older. If married, the same contribution limits apply to spouses who can also fund a separate nondeductible traditional IRA. (Reminder: IRS form 8606 must be filed each year a nondeductible traditional IRA contribution is made). Then in 2010, individuals can convert the nondeductible traditional IRA into a tax-free Roth account and have the choice of recognizing all of the conversion income in 2010 or averaging it over 2011 and 2012.
At conversion, investors would only be taxed on the earnings that have accumulated in the nondeductible IRA. After 2010, individuals may continue to contribute to a nondeductible traditional IRA and immediately convert to a Roth IRA, thereby effectively wiping out the income limitations on contributions. Investors initiating conversions after 2010 will be responsible for recognizing the income during the year of conversion.There is one catch: Individuals who already have a traditional IRA, including SEP and SIMPLE IRAs, cannot choose to only convert the nontaxable portion of the account, says Bryan Dudones, president of Nexus Financial Management. Even though investors are allowed to have multiple traditional IRAs; for tax purposes, all traditional IRAs must be lumped together and treated as a single account. Individuals need to add up the total value of all traditional IRAs and also the total amount of nondeductible contributions to those IRAs to determine what percentage of the conversion will be taxable. TIPRA has created a wonderful planning opportunity as the Roth IRA has not been a useful savings vehicle for high income taxpayers.
But with the passing of TIPRA, conversions to Roth IRAs will be available to everyone.About Nexus Financial Management LLC:Nexus Financial Management LLC, located in Jacksonville, Florida, is a fee-only independent Registered Investment Advisor providing personal service and objective investment guidance, regardless of asset size. To learn more about the services we provide, please visit our website. The views expressed are not intended as a forecast, a guarantee of future results, or specific recommendations. Each investor should consult their investment and/or tax professional to discuss individual circumstances.Contact:Bryan Dudones, President(877) 334-1376http://www.nexusfm.com.
Could a Roth IRA be Better Than a 401(k)?
Very few people whom I know are familiar with the benefits of the Roth IRA. It was named for the late Senator William Roth of Rhode Island, who proposed it. It is similar to a traditional IRA except contributions are never tax-deductible. Contributions to traditional IRAs are sometimes deductible or partially deductible, depending on your income and whether or not you have a retirement plan like a 401(k) at work. With Roth IRAs, individuals are limited to incomes of $95,000 ($150,000 for couples) to be eligible for full contribution amounts.
However, unlike the traditional IRA, you can withdraw your contributions from a Roth IRA at any time, at any age without penalty. Earnings are not taxed if you wait until at least age 59 1/2 to begin withdrawing them and have held your Roth IRA for at least five years. With a Roth IRA, the contributions are taxed without any deferment, but they grow tax-free and the gains are never taxed (see above). With a 401(k), contributions are tax-deferred,...
Could a Roth IRA be Better Than a 401(k)?
Ira > Could a Roth IRA be Better Than a 401(k)?
CBS Broadcaster Ira Joe Fisher Publishes New Poetry Book, 'Some Holy Weight in the Village Air'
Garden City, NY (ContentDesk) May 11, 2006 -- Ira Joe Fishers new collection of poetry, "Some Holy Weight in the Village Air," published by Athanata Arts, Ltd. will be officially released on July 20, 2006. Fisher, a nationally recognized broadcaster with over forty years experience, known for his work as weather anchor for CBS on The Saturday Early Show, is an accomplished poet who gives voice and depth to small-town American experience in the tradition of Robert Frost. Fishers book is the first volume of five to be published by Athanata Arts NYQ Poetry Series, established to present book-length collections of poets recognized by publication in the The New York Quarterly poetry journal founded by William Packard in 1969.Praised by Thomas Lux as a "splendid first collection," "Some Holy Weight in the Village Air" "chronicles small-town life, its scandals and secret tragedies and small undoings" (Paula McLain)in language which "often dazzles and is always compassionate, immediate, powerful,...
CBS Broadcaster Ira Joe Fisher Publishes New Poetry Book, 'Some Holy Weight in the Village Air'
Ira > CBS Broadcaster Ira Joe Fisher Publishes New Poetry Book, 'Some Holy Weight in the Village Air'
New Tax Bill Creates the Greatest Tax Break of Your Life
Pittsburgh, PA (ContentDesk) May 18, 2006 -- James Lange, CPA/Attorney, says
taxpayers with an AGI greater than $100,000 need to know about the New Open Season for Roth IRA conversions that is provided for in the new tax law.Respected Roth IRA expert Lange says: The new tax law is HUGE for taxpayers making more than $100,000 who have an IRA. The long term benefit to your family of making a Roth IRA conversion can be estimated by multiplying the current value of your IRA by 15. Wednesday, May 17, 2006, President Bush signed a major tax bill that
presents wealthy Americans with an outstanding lifetime opportunity. The Tax Increase Prevention and Reconciliation Act (TIPRA) will lift the $100,000 AGI ceiling on Roth IRA conversions for tax years after 2009. In 2010, wealthy Americans will, for the first time, qualify for
Roth IRA conversions. Lets look at a scenario:
a taxpayer makes more than $100,000 and he has a $500,000 IRA. If he converts his IRA...
Ira > New Tax Bill Creates the Greatest Tax Break of Your Life
How to Stretch Your IRA Tax-FREE
(ContentDesk) May 24, 2004 -- Income taxes are a great inhibitor to building wealth. I've talked about the power of stretching an IRA across multiple generations and how it can build tremendous wealth. Now, I'll show you how it can be done income tax-free.Last week I shared a little-known secret of how to legally turn an investment of $3500 per year into millions and millions of dollars. No, it wasn't by winning the lottery! It was through the power of ?stretching' an IRA. If you missed it you have to read it under the article archive at www.guardingyourwealth.com.
(Mr. Voudrie responds to questions from readers on an almost daily basis.
If you would like clear straightforward unbiased answers to your financial questions, contact e-mail protected from spam bots)Most people think that when they inherit an IRA that they have to take all the money out and pay taxes on it right away. But the IRS...
Ira > How to Stretch Your IRA Tax-FREE
How to Stretch Your IRA Tax-FREE
(ContentDesk) May 24, 2004 -- Income taxes are a great inhibitor to building wealth. I've talked about the power of stretching an IRA across multiple generations and how it can build tremendous wealth. Now, I'll show you how it can be done income tax-free.Last week I shared a little-known secret of how to legally turn an investment of $3500 per year into millions and millions of dollars. No, it wasn't by winning the lottery! It was through the power of ?stretching' an IRA. If you missed it you have to read it under the article archive at www.guardingyourwealth.com.
(Mr. Voudrie responds to questions from readers on an almost daily basis.
If you would like clear straightforward unbiased answers to your financial questions, contact e-mail protected from spam bots)Most people think that when they inherit an IRA that they have to take all the money out and pay taxes on it right away. But the IRS...
Ira > How to Stretch Your IRA Tax-FREE
5 Tips To Get You The Best Buy On Your Next Used Car
These days cars a lasting much longer than they used to do with so many people cutting back on finances many families are considering buying a used car.
Smart consumers know that buying a used car can be a much better deal than buying a new one if you know what you are doing.
Here are some tips that you can use to make sure you get the most out of your used car purchase.
1. Due Diligence
When you make any major purchase, it's Important...
Ira > 5 Tips To Get You The Best Buy On Your Next Used Car
Car Seat Mats
Car seat mats are a part of car interior furnishings. They are an integral part of the car interior, helping to keep it clean and tidy.
Car seat mats are especially useful during long drives as they make the seats comfortable. Also, they help to avoid backache due to continuous driving. People who are used to commuting long distances for work might have to fight traffic on top of the long drive.
Such individuals might find these car seat mats to be of great comfort. Not having...
car
Ira > Car Seat Mats
How Much Is Enough?
HOW MUCH IS ENOUGH?There is a lot of information on just how much protein you need to eat to gain the muscle you want to. It is true that protein builds muscle mass, but it can also be burned as energy instead of being used to build and recover muscle tissue. So what is the right balance? As an athlete, you need carbohydrates and protein both to reach a balance that will yield results. Bodybuilders need a carbohydrate-based diet since carbohydrates are stored in the muscle for energy. If your...
How Much Is Enough? fitness
Ira > How Much Is Enough?
Leather Jacket Blazer Coat Bomber Biker Skirt Pants Vests Handbags
This is the world of fashion: the beautiful models, the runways, the photographers, and the clothes. Fashion is not only what we wear, it is also how we describe ourselves to the world. When you're deciding which fashion is for you, take the time to consider your figure and style and also how you want to be perceived.
Style.....! What comes in style ? Different patterns of dresses, new fashionable clothings & accessories . If you're wearing a leather apparel , you will be the one who...
Ira > Leather Jacket Blazer Coat Bomber Biker Skirt Pants Vests Handbags
Ira Nexus Financial Management Explains How High Income Taxpayers Can Take Advantage of a Roth IRA