IRA Scenarios With Answers

Lets say you’re around 73 years old and still work full time, could you still contribute to your IRA?
​No you cannot.  Contributions can’t be made to an IRA beginning the year you turn 70. There is no exception.

What if you participated in a work place 401(k) could you contribute to an IRA then?
Yes you could! the deductibility of your IRA contribution may be affected depending on your filing status and earned income for the year. Now lets say you aren’t eligible to contribute to a Roth IRA because of your income. Is it preventing you from converting your traditional IRA to Roth IRA? No it isn’t,  Anyone can convert a traditional IRA to a Roth IRA regardless of their income level in the year of conversion. What if last December you pulled out your IRA so really you didn’t have an IRA balance on December 31,2015 to calculate your RMD. Does this exempt an RMD for 2015? No it doesn’t exempt, for purposes of RMD calculations all IRA assets “in transit” must be considered.

How are distributions received from an IRA taxed?
Inherited IRA will be taxed at your ordinary income tax rate for the year in which you received it. Lastly what is the deadline for making a 2015 IRA contribution? It will be April 15, 2016, its the same deadline for filing your tax return without extensions.

That’s all for IRA scenarios thanks to America’s Tax Solutions.

Source: America’s Tax Solutions Photo: Pexels 

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