SEP IRA

Posts Tagged ‘ira’

Question: I want to cash out my entire IRA?

I have a SIMPLE IRA floating around from a previous job with about $1,000 in it, and i need to cash it out to pay off a credit card. I need to know if i can do this, how soon, and what are the consequences to it? i know it’s not a 401k but i know the IRA is similar, help?

Answer: with the simple, there’s a 25% penalty if you cash out within 2 years of when you started working for the company. longer than that, it’s a 10% penalty.

this is in addition to paying regular income tax on the value of the account.

Recessionproof Real Estate Investing with a Self Directed IRA LLC or Solo 401k

Question: i requested an inservice withdrawal from my SIMPLE IRA and was told that it is not allowed, is this correct?

Answer: Read your plan document. A SIMPLE should be covered by the same withdrawal rules as an IRA: withdrawals constitute taxable income (ordinary income); 10% penalty if withdrawn before 59-1/2 (25% if in the the first 2 yrs of the plan); money must be in SIMPLE for 2 years before you can roll to an IRA.

There are some special withdrawals allowed for SIMPLEs:
- for medical expenses
-to buy a first house
- if you are completely disabled
- to purchase health insurance
- to pay for college expenses

So the withdrawals should be allowed, providing the money has been in the plan for at least 2 yrs.

Prohibited Transactions — What Are They?

Question: Can I rollover a “Rollover IRA” into a SEP-IRA?

I want to consolidate my investment accounts into one for easier tracking, by moving all my Rollover IRA accounts into my SEP-IRA. Can this be done, and what are the disadvantages?

I’m going to see an accountant next week, but I want an answer ahead of time so I can keep our meeting short

Answer: You can move all your IRA assets into one account. There are no disadvantages, assuming you are keeping your assets and not withdrawing them early.

The new account will not be a SEP IRA account, it will be a generic IRA account. Your custodian will probably create a separate bucket for the new money, which is a good idea from an accounting standpoint.