1.) It may not be too late to fund your IRA or ROTH-IRA for 2016. You can contribute up until the tax filing deadline of April 18th if you have not already filed your taxes.
2.) If you have enough earned income you may be able to contribute to your spouse’s IRA or ROTH-IRA even if they have no earned income. Consult your tax advisor and financial professional for the specifics on these rules.
3.) There is no income limit on contributions to a pre-tax IRA if you and your spouse did not contribute to an employer plan in 2016. If your spouse did but you did not there are higher limits so you may still be able to make this happen.
4.) You can still contribute to an IRA as long as you have enough earned income even if you are in the top tax bracket, you just can’t take the deduction.
5.) There are no income limits on converting from an IRA to a ROTH-IRA. When combined with the above information in fact #4 this can allow individuals in certain situations that may not be able to contribute directly to a ROTH-IRA due to income to contribute to an IRA and then convert. There are issues that can arise on this if you have other IRA money or even SIMPLE-Ira or SEP-IRA money so consult your financial professional and tax advisor to make sure you do this correctly.
Written by Brendan Pheasant CFP®, ChFC, LUTCF, AIF®, Brittny Koenig, Kelly Hugghins, CFP® and Chris Wilbur – Financial Advisors
Qualified distributions from a Roth IRA are income tax free. To be qualified, the Roth IRA holder must have met the five-year holding period AND the distribution must be due to the Roth IRA holder’s death, disability, first-time homebuyer or upon attaining age 59½ or will be subject to a 10% penalty in addition to income tax.
Investors' anticipated tax bracket in retirement will determine whether or not a Roth account versus a traditional retirement account will provide more money in retirement. Generally investors who are in a higher tax bracket at retirement relative to their current tax bracket while making contributions to a Roth account benefit more than an investor who is in a lower tax bracket at retirement.
Financial Advisors not provide tax advice and this should not be considered as such. Please consult a tax professional l for advice regarding your specific tax situation. Brendan, Brittny, Kelly and Chris are registered representatives and investment advisor representatives of CRI Securities, LLC and Securian Financial Services, Inc.
North Star Consultants, Inc., Insurance Products and Services I CRI Securities, LLC., Securities, Investments and Investment Advisory Services I Securian Financial Services, Inc., Variable Products, Securities and Investment Advisory Services North Star Resource Group offers Securities and investment advisory services offered through CRI Securities, LLC and Securian Financial Services, Inc. Members FINRA/SIPC. CRI Securities, LLC is affilaited with North Star Consultants, Inc., North Star Consultants Texas, Inc. and Securian Financial Services, Inc. Securian Financial Services, Inc. operates under separate ownership from North Star Consultants, Inc. and North Star Consultants Texas, Inc. North Star Consultants Texas, Inc. doing business as North Star Consultants of Texas in the state of Texas. 2801 Via Fortuna, Suite 450, Austin, TX 78746 1746502/DOFU 3-2017