IRA (Individual Retirement Account)

  • Roth IRA's
  • Traditional IRA's
  • Education IRA's
  • IRA Builder Account
  • IRA Highlights
  • Tax Information on IRAs
Roth IRA's

 

 

Roth IRAs The Roth IRA allows you to invest after tax dollars today, let the investment from tax-deferred and take qualifying withdrawals tax-free. If you do not withdraw any of the earnings for at least five years, and satisfy one of the qualifying events, those tax-deferred earnings become tax-free.

How much may I contribute?
Starting in taxable years after December 31, 2001, the amount qualified IRA owners are permitted to contribute annually to their IRAs will be gradually increased to $5,000. Additional catch-up contributions can be made by qualified individuals over age fifty.

If you qualify,you are permitted to annually contribute the following maximum amounts or 100% of your earned compensation and alimony; whichever is less: see chart for maximum contribution limits.


Am I eligible to make a full contribution?
Refer to the table below to determine if you are eligible to contribute the full amount for your filing status:

Full Contribution if MAGI is:
Limited Contribution if MAGI is:
No Contribution if MAGI is:
Single

$101,000 or Less for 2008

(105,000 for 2009)

$101,000 to $116,000
for 2008

($105,000 to $120,000 for 2009)

$116,000 or more
for 2008

($120,000 for 2009)

Married, filing Jointly

$159,000 or less for 2008

($166,000 for 2009)

$159,000 - $169,000
for 2008

($166,000 o $176,000 for 2009)

$169,000 or more
for 2008

($176,000 for 2009)

Married, filing separately
$0 or less for 2008 and 2009
$0 to $10,000
for 2008 and 2009
$10,000 or more
for 2008 and 2009

Involvement in an employer sponsored retirement plan such as a 401(k) or pension plan does not affect your ability to contribute to a Roth IRA, provided you meet the above income guidelines.

Can I convert my traditional IRA to a Roth IRA?
You may, provided you are a Single filer or married couple filing jointly with a modified adjusted gross income that does not exceed $100,000. Any portion of the converted amount attributable to deductible contributions and earnings must be included as taxable income. The entire taxable amount of the conversion must be included as income for the year the conversion is made.

When can I withdraw from a Roth IRA?
You may withdraw your Roth IRA contributions at any time, without tax and penalty fee. "Qualified distributions" may be withdrawn tax and penalty free. "Non-qualified" distributions may be taxable and subject to an IRS 10% early distribution penalty.

 

 

 

Traditional IRA's

 

In addition, many wage-earners are eligible for a full federal tax deduction. Some wage-earners are eligible for a partial deduction; others, no deduction.

 

A Traditional IRA is a long term savings plan that enables you to build a retirement fund on which you pay no federal income taxes on the earnings until you start to make withdrawals. Every IRA contributor receives this benefit.

 

 

 

 

 

 

Education IRAs

You are allowed to put $2,000 per child, per year, into a Coverdell Education Savings Account. That's $1,500 more per year than previous limits.
Additionally, qualified expenses apply to primary and secondary education as well as college. With the newest tax law change, you're even more likely to qualify for a Coverdell Education Savings Account.


 

Education IRA's

 

IRA Builder Account

 

 

IRA Builder Accounts are offered exclusively at Buckeye State Credit Union. You can build your IRA balance through payroll deduction. Another of the many advantages of Membership with Buckeye State Credit Union.
Buckeye State Credit Union has your “best interest” at heart.


Many other financial institutions charge fees to open or close an IRA. Buckeye State Credit Union charges no fee to open, maintain, or close our IRAs.
Others may require a large minimum deposit to open their IRAs. Buckeye State CU will let members open an IRA with even a zero balance if they have signed up to fund it with payroll deduction. You may add any amount at any time to a BSCU IRA.


It is called an IRA Builder account because we want to encourage members to start saving for retirement no matter how much, or how little, they can afford to put in.
When you have a substantial amount built up, we encourage you to withdraw it and roll it over to an IRA that might be a stock market account or other investment venue for maximum returns.

 

 

 

 

 

 

 

 

 

 

 

 

Greater catch-up contributions.
Individuals age 50 and over can now exceed the regular annual contribution limit by $1000 through tax year 2009!


Move rollover options
It’s a smart move to roll assets from your retirement plan into a traditional IRA when changing jobs or retiring. By choosing a direct rollover - instead of the cash payment option - you delay taxes, avoid mandatory 20% federal withholding and other tax penalties. Until 2002, you could only roll taxable distributions from your 401(k) and 403(b) plans over to an IRA. Today, funds from governmental 457(b) plans are also eligible for rollover.


When can I withdraw from a Traditional IRA?
You can withdraw funds from your IRA any time after you reach age 59 1/2. Distributions taken prior to age 59 1/2 are subject to a 10% early withdrawal penalty unless the distribution is:
-Made to a beneficiary due to the account holder's death.
-Made to an account holder who has become permanently and totally disabled.
-Made as part of a series of "substantially equal" periodic payments.
-Used to pay medical expenses in excess of 7.5% of the account holder's adjusted gross income.
-Used to pay health insurance premiums for participants unemployed 12 or more weeks.
-Up to $10,000 used for the first time purchase of a home.
-Used to pay for qualified higher education expenses.
Distributions must start by April 1 following the year in which the participant reaches age 70 1/2. Failure to begin distributions at this point will impose penalties. The Worker, Retiree and Employer Recovery Act of 2008, waives the required minimum distribution for IRA owners 70 1/2 or older in 2009.

IRA Highlights

 

 

 

 

 

 

 

 

 

 

Tax Rules In June 2001, Congress enacted into law several changes. Here is a listing of some of the changes that took effect in the 2002 tax year.

How much can I contribute?
Starting in taxable years after December 31, 2001, the amount qualified IRA owners are permitted to contribute annually to their IRAs will be gradually increased to $5,000. Additional catch-up contributions can be made by qualified individuals over fifty.
You are permitted to annually contribute the following maximum amounts or 100% of your earned compensation and alimony; whichever is less:

New Traditional & Roth IRA
Maximum Contributions Limits
2006
2007
2008
2009
Under Age 50
$4,000
$4,000
$5,000
$5,000
TIRA Age 50-70 1/2
$5,000
$5,000
$6,000
$6,000
RIRA Age 50 or Older
$5,000
$5,000
$6,000
$6,000

New Traditional and Roth Spousal Rules
Spousal IRA rules enable married couples filing jointly to contribute the maximum amount to their separate IRA accounts even if one spouse has little or no earned income. To qualify, their combined earned income must be equal to or greater than the total contributed amount.
With a Roth IRA, unlike a traditional IRA, you can continue to make contributions even after you have reached age 70 1/2, provided you have earned income.

Federal Income Tax Filing Status
 
Year
Full Deduction if MAGI is at or Below
Partial Deduction if MAGI is:
No Deduction if MAGI is at or above
Single, Active Participant

2008
2009

$53,000
$55,000
$53,000-$63,000
$55,000-$65,000
$63,000
$65,000
Married Filing Jointly, Active Participant

2008
2009

$85,000
$89,000

$85,000-$105,000
$89,000-$109,000

$105,000
$109,000
Married Filing Jointly, Not Active Participant, but Spouse Is

2008
2009

$159,000
$166,000
$159,000-$169,000
$166,000-$176,000
$169,000
$176,000
Married Filing Separately, Filer or Spouse Active Participant

2008
and
2009

$0
$0 - $10,000
$10,000

Furthermore, an individual who does not participate in an employer plan, yet their spouse does, may deduct their regular IRA contributions provided their combined adjusted gross income level is below $166,000. They will be allowed a smaller maximum deduction if their combined adjusted gross income is greater than $166,000 provided it is not over $176,000.

How much is deductible from my taxes?
For those not covered by an employer sponsored retirement plan, you will receive a full deduction regardless of your income. If you participate in an employer sponsored retirement plan, your income and filing status determines the amount that your contribution is deductible from taxes. The above chart illustrates the increasing maximum income levels for single filers and couples filing jointly to deduct all or part of their IRA contributions.
IRA Tax Information

 

 

Copyright(C) 2013 Buckeye State Credit Union. All rights reserved.
Equal Housing Lender
America's Credit Unions
Facebook
Google+
Password
User ID