SEP IRA

Archive for August, 2007

Irish Rebel song – Michael Collins

Question: Claiming losses in ROTH IRA.?

I closed my Roth IRA in 2009 and want to claim losses on Schedule A.
In 2003 I converted SIMPLE IRA To Roth Ira and the amount ($12000) is indicated on that year form 8606. Also I made contributions to this ROTH IRA account in 2005 and 2006 ($4000 each year). But looking at 2005 and 2006 Federal return I do not see any indication of these contributions (no form 8606). I do my taxes using TaxAct so I probably put the Contribution but 8606 was not generated.

Answer: Sure. That is the correct basis.

The brokerage firm reported the contributions to IRS each year so they do have a recorde.

Part 05 of 12 – Corporation Sole

Question: early IRA distribution- withholding tax percentage?

I’ve had a SIMPLE IRA for 5 years and I need to get the funds. I know that there will be a 10% penalty for early withdrawal and that I also need to pay federal tax on it as income. My question is what percentage do I need to have withheld? I know they automaticly take 10% unless you specify more. My tax bracket is 25%- is that what I should put on the distribution request? I don’t want to owe a ton at tax time or worry about underpayment penalties…

Answer: If you can request, request 35%. That is the 25% for the income tax, and an additional 10% for the penalty. If you have a state income tax you’ll need to save a few percent for that tax as well.

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