SEP IRA

Archive for July, 2009

Question: Are my friends selfish or is it just me?

I asked one to help a big group of us try to make it so that people could bring a date to our prom all that was needed was a simple signature and I know it’s not her views because she was going on and on about how unfair it was that you couldn’t . But she won’t sign because it doesn’t effect her as she has no date but her friend needs this to pass and it’s not just this incident ira many incidents where you ask if you can borrow a note from a day you missed and she says know because she added notes and you might take her ideas and to get them from some one else yet everytime we do a group project she just takes all my ideas and won’t share hers. Did I mention I have a better mark in the class? Because it just doesn’t make sence to me. I don’t need her ideas, and all we want is to make prom the best fir all.

Answer: No she sounds extremely selfish. She wants to take but not give. I had a friend like that and it was soooooooooooo annoying!! I am so sorry you have to deal with it! What I did was I just stop involving her in stuff and I just didn’t ever ask her for anything and never gave her anything. Soon enough she got the hint and began to learn how to share at the age of 18 wow!

Question: 2009 filing deadline extended due to flooding. How about IRA Contribution?

The IRS has extended the filing date for some northeast states due to the declared state of emergency. Does this extension also apply to my SEP-IRA Contribution for 2009? I need to do my taxes before I can figure out the amount I can contribute since it is based on net income My investment advisor couldn’t answer this.

Answer: Yes, the extension includes extension of the deadline for making tax year 2009 IRA contributions. A partial extract from the IRS news release:

“As a result, the IRS is postponing until May 11 certain Deadlines for taxpayers who reside or have a business in the disaster area. This includes the April 15 deadline for filing 2009 individual income tax returns, making income tax payments and making 2009 contributions to an individual retirement account (IRA).”

See the full news release here: http://www.irs.gov/newsroom/article/0,,id=108362,00.html

Talks About Talks and Iran Sanctions

Question: Regular 401k, Regular IRA, and my wife’s Roth IRA plus our Investment?

I’m using simple terminology to help others who may benefit from my questions.

Facts: our planned retirement age 62, won’t live in USA, we will have 5 sources of income: my 401k + IRA + military pension, her IRA , & our investments.

Unknowns: Social Security for us, & my employer’s pension; not planning on them.

1. I have a regular 401k. Would like to know what mandatory US government deductions (e.g., taxes) will I owe on each withdrawal? A simple line-item answer is fine.

2. Same question for my traditional IRA, & for my wife’s Roth IRA.

3. Our investments are made with after-tax dollars. Since I already paid taxes on that money before investing it, when I reach 62, will I have to pay taxes on my withdrawals? If so, would that be double-taxation: the money was taxed before I invested it & then the gov’t will tax it again upon withdrawal? Remember: I also paid tax on the dividends and capital gains thru the years.

4. Do RMDs apply to IRAs & 401Ks?

Answer: regular 401ks and traditional 401ks get added together and taxed as ordinary income. If you take lump sum distributions then they may withhold 30% becasue you won’t be residing in USA (that’s a MAY).

Roth IRA is different. Assuming it’s in for the right amount of time it’s a non-taxable event.

After tax dollars that have had dividends and capital gains already paid on would not be taxed at all. Treat that no differently than you are currently doing so.

RMD’s apply to 401ks and traditional IRA’s but not to ROTH IRA’s. ROTH IRA’s also have better estate planning options than the 401k and traditional IRA.

Retirement Plans & Investments : How to Open a SIMPLE IRA