Interactive Review
Course #10072
Individual Retirement Arrangements
IRS Publication 590
1. Traditional IRAs 11
What Is a Traditional IRA?
Who Can Set Up a Traditional IRA?
How Can a Traditional IRA Be Set Up?
How Much Can Be Contributed?
When Can Contributions Be Made?
How Much Can You Deduct?
What If You Inherit an IRA?
Can You Move Retirement Plan Assets?
When Can You Withdraw or Use Assets?
When Must You Withdraw Assets?
What Acts Result in Penalties or Additional Taxes?
2. Roth IRAs 4
What Is a Roth IRA?
When Can a Roth IRA Be Set Up?
Can You Contribute to a Roth IRA?
Can You Move Amounts Into a Roth IRA?
3. Savings Incentive Match Plans for
Employees (SIMPLE) 2
What Is a SIMPLE Plan?
How Are Contributions Made?
How Much Can Be Contributed on Your Behalf?
When Can You Withdraw or Use Assets?
4. Retirement Savings Contributions Credit 1
Total Review Questions 18
What is a Traditional IRA?
1. A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA.
Who Can Set Up a Traditional IRA?
2. You cannot have a traditional IRA if you are covered by any other retirement plan.
How Can a Traditional IRA Be Set Up?
3. You can set up different kinds of IRAs with a variety of organizations.
How Much Can Be Contributed?
4. Trustees’ administrative fees are subject to the contribution limit.
When Can Contributions Be Made?
5. Contributions can be made to your traditional IRA for a year at anytime during the year or by the due date for filing your return for that year, not including extensions.
How Much Can You Deduct?
6. Generally, you can deduct the greater of the contributions to your traditional IRA for the year, or the general limit (or the spousal IRA limit, if applicable).
What If You Inherit an IRA?
7. If you inherit a traditional IRA from anyone other than your deceased spouse, you cannot treat the inherited IRA as your own.
Can You Move Retirement Plan Assets?
8. You cannot transfer, tax free, assets (money or property) from other retirement programs (including traditional IRAs) to a traditional IRA.
When Can You Withdraw or Use Assets?
9. You can withdraw or use your traditional IRA assets at any time.
When Must You Withdraw Assets?
10. You can keep funds in a traditional IRA indefinitely without having to pay a 50% excise tax on the amount not distributed.
What Acts Result in Penalties or Additional Taxes?
11. Even if you are under age 59 ½, if you paid expenses for higher education during the
year, part (or all) of any distribution may not be subject to the 10% additional tax.
What Is a Roth IRA
12. Like a traditional IRA, you can deduct contributions to a Roth IRA.
Can You Contribute to a Roth IRA?
13. Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than $166,000 in 2007 for married filing jointly or qualifying widow(er).
Can You Contribute to a Roth IRA?
14. You can make Roth IRA contributions for any year at any time.
Can You Move Amounts Into a Roth IRA?
15. You may be able to convert amounts from either a traditional, SEP, or SIMPLE IRA into a Roth IRA.
Savings Incentive Match Plans for Employees (SIMPLE)
What Is a SIMPLE Plan?
16. Contributions under a SIMPLE IRA plan may be made to SIMPLE IR, or to any other type of IRA.
Savings Incentive Match Plans for Employees (SIMPLE)
When Can You Withdraw or Use Assets?
17. If a rollover distribution (or transfer) from a SIMPLE IRA does not satisfy the 2-year rule, and is otherwise an early distribution, the additional tax imposed because of the early distribution is increased from 10% to 25% of the amount distributed.
Retirement Savings Contributions Credit
18. You may be able to take a tax credit that could reduce the federal income tax you pay dollar for dollar, if you make eligible contributions to a qualified retirement plan, an eligible deferred compensation plan, or an individual retirement arrangement (IRA).
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CPE Accounting and Tax Institute
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