SEP IRA

Posts Tagged ‘irs’

Question: What is the difference between a TSP and a SIMPLE IRA? They have different Contribution limits?

I am talking about the Thrift Savings plan that federal employees have access to. Does anyone have a good comparison?
I have a good understanding of SIMPLE and ROTH IRAs, so if you could relate to that, I would be grateful.

Answer: I’m not a financial advisor but I’ll give this my best shot.

My understanding of the Thrift Savings Plan (TSP) is that it is an employers sponsored plan similar to a 401K in the private sector. So one of the main differences is that an Independent Retirement Account (IRA) is, as the name implies, independent, ie. not sponsored by an employer and therefore is set up by the individual employee. I believe the Federal Government may offer some type of “matching” funds, ie. if the employee puts money into the TSP the government will match it up to a certain level. If this is the case it is WAY better to invest in that than in an IRA for which you would receive no matching money from the government. I do not know if the TSP puts in before or after tax dollars. If you work for the Federal Government you can ask your personnel office for help. If you search for it online you should probably find many details.

Finance & Investment Tips : What Is a IRA Account?

Question: What happens to the CPA who does your taxes wrong?

I had my sister in laws CPA do my taxes for 2004, 2005 and 2006. Well in 2007 I got a notice from the IRS saying I owed back taxes for all those years. I had a certified CPA look at thoes back taxes. He found that the old CPA had added my SEP-IRA from work as income i had borrowed. I never borrowed from my SEP-IRA in those back years. I’ve tried contacting the old CPA, which she took one of my calls and never called me back. She changed her number. What can I do?

Answer: My tax preparer’s policy is that if he makes a mistake, HE pays the penalty and interest. If she is really a licensed CPA report her to the licensing agency. You could take her to small claims court to get the money. Also, it is clear on my tax returns who prepared them. Is her name on them anywhere? Did you check the return before you signed it? Good luck..

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Question: Old people say they are on a fixed income, could they mean they are getting 50K month in income?

If it’s from an annuity or a pension it would be FIXED.
Also money from CD investments, and dividend paying stocks would be fixed.
So why are all these old people complaining about being on a fixed income?

Why don’t they just say all they have is social security?
It would make it much more simple to understand.

When I think of fixed income for some reason I see vairous amounts of retirement accounts that have been well invested and planned with products that pay steady income. I see pensions and RMD’s out of ira accounts.

Fixed income to me means well invested wealth that is coming in.
Why does it mean to old people that they have nothing to their name.
Is it an expression?

Isn’t everyone that is retired on a fixed income.
Even if you are sitting in stocks, you are probably following a certain rule such as 4% out a year, and adjusting for inflation.
Thats’ Fixed.
Even ss gives you an inflation adjustment. You follow the same number for your retirement.

Answer: A fixed income generally means you cant increase your income through job changes, promotions and performance raises and bonuses. In retirement you’re generally more in a spending phase than a savings and investment phase. Generally you get only cost of living raises and whatever your savings and investments return, which is probably less than it was before retirement because you cant afford to take as much risk. And then there is inflation and maybe taxes. Health care costs can be higher too. If one has saved and invested well and keeps costs low they can live well in retirement though.

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