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Posted by Zigball on April 4, 2008, 1:31 pm
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> > > > Hello All,
>
> > > > I am trying to figure out the Roth IRA for tax purpose. Is there
> > > > anyone who can give me understanding for a 1040 tax return. I found
> > > > that non deductible contributions and deductible contributions make a
> > > > difference with Roth IRA contributions,
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> > > "Deductible contributions" and "non-deductible contributions"
> > > are terms pertaining to TRADITIONAL IRAs, not Roth IRAs.
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> > > You do not report the Roth IRA contributions you make.
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> > > --
> > > Rich Carreiro rlc-n...@rlcarr.com
>
> > > --
> > > << ------------------------------------------------------- >>
> > > << The foregoing was not intended or written to be used, >>
> > > << nor can it used, for the purpose of avoiding penalties >>
> > > << that may be imposed upon the taxpayer. >>
> > > << >>
> > > << The Charter and the Guidelines for submitting posts >>
> > > << to this newsgroup as well as our anti-spamming policy >>
> > > << are atwww.asktax.org. >>
> > > << Copyright (2007) - All rights reserved. >>
> > > << ------------------------------------------------------- >>
>
> > Thanks to all,
> > In Addition:
>
> > Strange I used to work for a brokerage firm, I should know a little.
> > Besides is it safe to assume that the IRS assumes that all Roth IRA
> > contributions are pre-taxed or am I in a galaxy far far away? How are
> > Roth IRA contributions made? Where does the contributions have to come
> > from (are there regulations) and are the contributions ever taxed on a
> > Roth Ira(if so when and how in basis)?
>
> > Traditional IRA's, is the contributions taxed twice if you contribute
> > income from your net income (job)? I need better understandings of
> > these things I will appreciate any one's help again, thanks in
> > advance.
>
> Zigball, these are the general principles:
>
> Contributions to a traditional IRA are deductible in arriving at
> adjusted gross income in the year in which the contribution is made --
> i.e., they come from pre-tax income. The amount that may be
> contributed and deducted is limited, and an individual who is covered
> by an employer retirement plan or has income above a certain level may
> not contribute to a traditional IRA. When you withdraw funds from a
> traditional IRA, usually every dollar you withdraw is taxable as
> ordinary income. After the taxpayer reaches age 70-1/2, a specified
> minimum amount (the "required minimum distribution," or RMD) must be
> withdrawn and included in taxable income each year. Any balance
> remaining in an IRA at the taxpayer's death is taxable income ("income
> in respect of the decedent") to the heirs.
>
> A Roth IRA is a special kind of IRA that can receive nondeductible
> contributions and, if certain conditions are met, all distributions
> from a Roth IRA are tax-free. There are no RMDs, so funds may be left
> in a Roth IRA and the taxpayer's heirs may inherit the account without
> recognizing taxable income.
>
> You can convert a traditional IRA to a Roth IRA by rolling the funds
> over. The amount rolled into the Roth account is taxable income;
> however, the income and tax liability may be spread over 4 years (it
> will be 2 years after 2011).
>
> These are just the general principles. There are a lot of details.
> Consult a professional tax adviser before deciding whether you can or
> should contribute to a traditional or Roth IRA, or whether you should
> roll a traditional into a Roth.
>
> Katie in San Diego
>
> --
> << ------------------------------------------------------- >>
> << The foregoing was not intended or written to be used, >>
> << nor can it used, for the purpose of avoiding penalties >>
> << that may be imposed upon the taxpayer. >>
> << >>
> << The Charter and the Guidelines for submitting posts >>
> << to this newsgroup as well as our anti-spamming policy >>
> << are atwww.asktax.org. >>
> << Copyright (2007) - All rights reserved. >>
> << ------------------------------------------------------- >>- Hide quoted
text -
>
> - Show quoted text -
Thank you Katie for your answer.
I want to clarify this, so if I took my pre taxed income and
contributed it to a IRA account then the current year tax return I
would record the IRA contributions as income and then take the
deduction for the whole amount contributed to reduce it to zero? Do
you know what the limits are to contribute to an IRA I think $4000 a
year and what are the limits to the deduction I assume less than $4000?
========================================= MODERATOR'S COMMENT:
Please delete all unnecessary material from the prior message when
responding.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>
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