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IRA Contribution Limits 2011

SelfDirectedIRAStore.com — Sun, 07 Aug 2011 07:10:46 +0000

IRA Contribution Limits 2011 establish the most you can save for retirement via individual retirement accounts. The standard IRA and Roth IRA 2011 contribution limits, plus the 2011 standard IRA deductibility restrictions and the 2011 Roth IRA income limits, are all important considerations.

(Note : If you are searching for the IRA limits for 2010 related to the April 15, 2011 tax filing deadline, review the 2010 IRA contribution limits instead of this article which is specific to IRA Contribution Limits 2011).

IRA Contribution Limits 2011

The IRA Contribution Limits 2011 have not changed from 2010. Starting in 2008, the maximum you may contribute to a regular IRA each year is $5,000. But, if you will be 50 years of age or older by the end of the IRA Contribution Limits 2011 cutoff, you are allowed to contribute an additional $1,000, for a $6,000 total IRA contribution limit. Remember that you and/or your spouse are required to have earned income at least as much as the amount you contribute to comply with IRA contribution limits 2011.

These IRA Contribution Limits 2011 restrictions apply to both standard and Roth IRAs. Although you may be eligible to contribute to both plans, your combined contribution to both accounts may not be greater than your limit above ($5,000 or $6,000).

2011 Deductible IRA Contribution Limits

Although there is no maximum income restriction for contributing to a regular IRA under IRA Contribution Limits 2011 guidelines, there are income caps to deducting standard IRA contributions, which will be different based on marital status, income, and workplace retirement (e.g., 401(k), 403(b) plan eligibility).

2011 Roth IRA Income Limits

IRA Contribution Limits 2011 state that unlike standard IRA contributions, not every worker can contribute to a Roth IRA. Based on an individual’s marital status and income, some upper earners are not eligible to contribute to Roth IRAs. However, because these plans are so advantageous to your preparations for retirement, be sure to understand the restrictions each year before concluding you don’t qualify.

2011 Roth Conversion Income Limits

Even if you earn too much income for a direct Roth IRA contribution, you may be able to use a Roth IRA via the backdoor. The opportunity to convert a regular IRA to a Roth IRA became accessible to everyone regardless of income on January 1, 2010. Historically, a conversion was only accessible to earners who had a modified adjusted gross income of $100,000 or less, which is different for IRA Contribution Limits 2011.

For more information, consult IRS Publication 590.

For information about Roth IRA Contribution Limits 2011, click here.

IRA Contribution Limits 2011

…are changing in 2012! Come back for more updates.

Understand the Benefits of a Health Savings Account

Self Directed IRA Store — Fri, 01 Jul 2011 18:38:30 +0000

Because Health Savings Accounts traditionally have a higher deductible – $1100 annually for an individual – the insured are thought to be learning to be more health conscious. They may be more careful about the expenses associated with health care, and vigilant against industry excesses. If true, this could be a great help in increasing and managing efficiency in the healthcare system. It benefits all when users are engaged actively in making healthcare purchasing decisions.

Portability is certainly an advantage of a Health Savings Account. The account can be transferred from one managing agency to another. Most Health Savings Account programs provide first-dollar coverage for preventative care, such as annual physicals, immunizations, well-baby/child care, mammograms, paps, and certain cancer screenings.

Funds contributed to the Health Savings Account can be rolled over from year to year, so there is no urgency to use the money unnecessarily. This means growth in the savings for the account owner, and these funds accumulate tax free for future medical expenses. The account holder can withdraw his savings from the Health Savings Account after turning age 65 without paying any taxes or penalties. And all contributions to this account are made initially without being subject to federal taxes, so the Health Savings Account is tax free whether at contribution, withdrawal, or when used for qualified medical expenses.

With rising healthcare costs, the Health Savings Account provides protection against the expenses associated with illness and injury. It is a unique savings product and an alternative to traditional insurance plans. The tax advantage of a Health Savings Account make it worth considering.

Get the Tax Advantage of a Health Savings Account

Self Directed IRA Store — Thu, 16 Jun 2011 18:35:52 +0000

A Health Savings Account is a smart alternative to traditional health insurance. It’s a savings product that offers a different way for consumers to pay for their health care. The funds contributed to the account are not subject to federal income tax when deposited into the plan, and are used to pay for qualified medical expenses at any time without federal tax liability.

Those who are eligible to open a Health Savings Account are:

Individuals who are covered by a High Deductible Health Plan (HDHP)
Individuals not covered by other health insurance plans
Individuals not enrolled in Medicare

A person can sign up for a Health Savings Account with banks and credit unions, insurance companies and other approved providers. Not all insurance companies offer qualified Health Savings Accounts, so it is important to do your homework. An employer can set up a Health Savings Account plan for employees, and that plan is always owned by the individual. Direct online enrollment in this plan is available in most states, with the exception of Hawaii, Massachusetts, Minnesota, New Jersey, New York, Rhode Island, Vermont and Washington.

Contributions to the Health Savings Account are made by the individual who owns the account, but may also be made by an employer or any other person. When made by the employee, that contribution is exempt from federal tax. If made by the employer, the contribution is not included in the employee’s income.

The Health Savings Account as a Solution for Rising Costs

Self Directed IRA Store — Wed, 01 Jun 2011 18:30:53 +0000

Established as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the Health Savings Account is a combination of features found in traditional health insurance plans married to retirement plans. The goal was a program to shield money for health care from taxes. Under a Health Savings Account qualified medical expenses might include medical doctors, dental and optical care, long-term care, chiropractic care, as well as Medicare Part A or Part B, and Medicare HMO insurance premiums.

The contribution to a Health Savings Account is permitted providing the health insurance accompanying it has an out-of-pocket deductible of at least $1100 annually for an individual, and $2200 for family coverage.

The Health Savings Account has a great benefit in tax breaks, since all contributions are pre-tax money. If the funds are then used for qualified medical expenses, the entire saved amount can be withdrawn free of tax burden. Unused balances in the Health Savings Account can be rolled from year to year.

With healthcare costs rising at an alarming rate, the Health Savings Account is a win for employees who participate. They take on a higher level of responsibility for medical expenses than with a traditional insurance policy, but the flexibility of moving the unused funds forward and having them tax free often outweighs the burden of a higher deductible. Because of that deductible, participants often learn not to seek unnecessary medical treatment and are careful to manage their visits to a physician.

Health Savings Account

Self Directed IRA Store — Wed, 25 May 2011 02:17:26 +0000

If you have a high-deductible health plan, consider an HSA – Health Savings Account. There are numerous advantages to the plan for those who qualify. The money you deposit in the plan isn’t taxed, and you can invest it. The account owner has control of how the money is spent, so unused funds stay in the account and can be used toward paying future medical expenses. The amount set aside is determined by the account owner to the allowable limits. Annual contributions for 2011 are $3050 for individuals and $6150 for family coverage. There is an additional catch-up contribution amount allowed for qualified persons 55 years and older, raising the total to $4050 for individuals and $7150 for families.

The Health Savings Account allows the account owner to shop for health care based on cost and quality, and the contributed funds can be put in the account on a pretax basis, or may be deducted from the taxable income. The Health Savings Account is a favorable choice for people saving for future health care expenses. The plan has been available since 2003 to help individuals spend their health care dollars wisely and prepare for unforeseen medical expenses in their futures.

There are self-directed forms of the Health Savings Account available that allow the account owner to invest the contributions in conventional stocks, bonds, and mutual funds, but also allow other investment choices including real estate, tax liens, and promissory notes. For persons with an interest and expertise in less traditional investments, having a broader range of investment options is very appealing. Not all custodial companies offer the full menu of investment options, so check with the company prior to establishing your account, and ask about maintenance and transaction fees that will be associated with your plan. Expanding your HSA investment opportunities will help make the most of your contributions and help your plan become an excellent safeguard toward future medical expenses.

Photo credit to Renjith Krishnan

IRA Contribution Limits 2010 and 2011

socialoomph — Mon, 18 Apr 2011 07:45:08 +0000

IRA Contribution Limits For several years, the contribution limit for an IRA stayed at $2,000, but policymakers realized that inflation made this limit inadequate for meeting the retirement planning needs of individuals. If you are using IRAs to fund your retirement, there is some good news about the 2010 and 2011 limits. IRA Contribution Limits [...]

Source: SEP IRA Blog

2010 IRA Contribution Limits

socialoomph — Mon, 18 Apr 2011 04:45:14 +0000

IRA Contribution Limits 2010 If you are below 50 years old at the end of 2010: The maximum contribution that you can make to a traditional or Roth IRA is $5,000 or the amount of your taxable wages for 2010, whichever is smaller. This limit can be split between a traditional and a Roth IRA, [...]

Source: SEP IRA Blog

Retirement Ready with the SEP Traditional IRA

socialoomph — Thu, 07 Apr 2011 04:45:13 +0000

A Simplified Employee Pension plan, referred to as a SEP, isessentially a grouping of traditional IRAs managed for employees. The SEP traditional IRA was developed to benefit small businesses and self-employed people, and isfrequently the plan of choice for sole proprietorships, LLCs, S and C corporations, and partnerships. In the small business model , an employee, [...]

Source: SEP IRA Blog

Equipment Leasing Investing with a Self Directed IRA Custodian

Self Directed IRA Store — Sat, 02 Apr 2011 05:04:28 +0000

Equipment leasing investing provides attractive benefits for all parties involved, as long as you are working with the right self directed IRA custodian. For the individual, they do not have to maintain and purchase large pieces of machinery that may only be used seldom. For the investor, it provides some great tax benefits. The benefits for the leasing company are fourfold:

• Debt is lowered from the company balance
• Less expensive way to finance
• Helps with finding a purpose for equipment that the company no longer uses as often
• Opens up capital to be used for other purposes

Examples of Leased Equipment

There is a wide array of equipment that could be leased. The following is just a list of examples:

• Aircraft
• Computers
• Solar energy devices
• Construction equipment
• Cable television
• Oil drilling equipment
• Gym equipment
• Photocopiers

The options are endless, but it’s important to note that real property is not included in this list of investments.

The IRS and Equipment Leasing Investment

In order to comply with the IRS, investors in equipment leasing must provide 20% of the purchase price of the equipment and their involved risk must also be 20% to be eligible for the tax benefits of operating a leasing company. The IRS has many safeguards in place to regulate the rental of the equipment. Many of these guidelines help ensure that it is actually a lease and not a conditional sale.

The IRS carefully examines these transactions to make sure it is more than just a thinly veiled sale of equipment. So if you decide to just name your transaction a lease, it’s not going to work.

You will have to show that it passes an “economic viability test”. One test would be if the present value of the equipment stays the same or increases after the leasing period is over. Another example would be if the payments that the lessee makes on the equipment actually exceed the value of the equipment.

Other factors that would make the IRS consider it a sale includes:

• Does the equipment lose all value at the end of the lease?
• Does the lessee have the option to purchase the equipment at an exceptionally low price?
• Does the lessee have to repair and maintain their own equipment?
• Does the lessee keep the equipment at the end of the rental?
• Is a portion of the lease considered “interest”?

Other Benefits of Equipment Leasing

The obvious perk to equipment leasing is the tax benefits. The equipment also holds residual value at the end of the lease term. Other tax benefits include deductible interest, operating expenses, and depreciation.

Finding a Self Directed IRA that Offers Equipment Leasing

If you have knowledge and experience in a particular area of equipment that is eligible on the rental market, your IRA can own all or part of an equipment leasing business.

There are many companies that claim to offer self directed IRAs, but many of them are not truly self directed. This means that your SDIRA should not be restricted by anything but IRS rules and regulations. A truly self directed IRA custodian will offer equipment leasing investing among its list of investment options.

SEP Traditional IRA – Know the Facts

socialoomph — Wed, 30 Mar 2011 04:45:17 +0000

A SEP traditional IRA is a plancreated to let employers contribute to the retirement accounts of their employees through a pre-tax salary reduction. The SEP traditional IRA account is established for each qualified employee, and each employee maintains control of their own account. Self-employed people can establish a SEP account for themselves. The SEP traditional IRA [...]

Source: SEP IRA Blog

SEP IRA Employee – Taking the Extra Advantage

socialoomph — Mon, 28 Mar 2011 04:45:14 +0000

If you are a SEP IRA employee, you have afantastic opportunity to accumulate retirement savings through your employer’s SEP plan. The SEP is a common-sense and solid program particularly intended forsmall companies and the self-employed worker , with the huge advantage oflarger contribution limits. In the small company scenario, the employerdecides the contribution percentage, which must [...]

Source: sep-ira-employee-taking-the-extra-advantage/2011/03/”>SEP IRA Blog

Solid Opportunity for the SEP IRA Employee

socialoomph — Sat, 26 Mar 2011 04:45:14 +0000

If the small company you work for sets up a SEP plan – the Simplified Employee Pension – you, as a SEP IRA employee have an opportunity to be part of asound retirement program that benefits everyone. For the employer, there is a significantlylower cost to establish the account , tax advantages, and the reporting and [...]

Source: SEP IRA Blog

Big Benefits for the SEP IRA Employee

socialoomph — Thu, 24 Mar 2011 04:45:14 +0000

Simplified Employee Pension plans, generally known as SEPs, can provide a good source of retirement earnings bymaking it possible for employers to set aside income in retirement accounts for themselves and for their SEP IRA employee workers. Under the SEP plan, the employer contributes straight to traditional individual retirement plans established for employees, funded through a [...]

Source: SEP IRA Blog

SEP IRA Tax – Finding Savings Shelter

socialoomph — Tue, 22 Mar 2011 04:44:28 +0000

What are yourresponsibilities on SEP IRA tax? SEP IRA funds are taxed at the ordinary income tax rates when the qualified withdrawals are taken after age 59 ½ years old . This is the identical rule that applies to traditional IRAs. Contributions to the SEP plan are deductible, so the contributions can lower a taxpayer’s income [...]

Source: SEP IRA Blog

SEP IRA Account – Plan and Profit with Your Employees

Self Directed IRA Store — Mon, 21 Mar 2011 14:38:14 +0000

In the past, many small business owners were unable to have a profit-sharing or pension plan for their workers , or to attract excellent employees to their business . The SEP IRA account has changed all that, and made it easy to set up and administer at a very small cost to the business. A SEP IRA account is another version of the original IRA designed for individuals, performing in the same way for the business owner. The account operates as a simplified pension plan, and can be rolled over into other types of IRA’s if employment changes or the owner becomes eligible for an alternate plan. A feature of the SEP IRA account is the simplicity, and it combines that with flexibility and portability, making it an excellent choice for self-employed people and small companies . Administrative costs are low. A SEP plan can be set up for the year as late as the due date, including extensions, of the business’s income tax return for that year. In a small company , benefits for one must be offered to all eligible employees. The business owner sets the contribution limit, up to 25% of the employee’s total income, and that portion of compensation is tax deductable. The self-employed can designate as much as 20% of earnings, with the limit on contribution calculated on the self-employed worker tax return. Disbursements from a SEP IRA account can start as soon as 59 ½ years old, and are mandated to begin by age 70 ½ years old. Any employee may terminate the SEP IRA account at any time by notifying their employer. The account belongs to, and is controlled by the employee, and the employer sends the contributions to the financial institution where the SEP IRA account is maintained. Each employee makes investment choices within his own plan. Eligible employees must be 21 years old, have worked for the company three of the past five years, earning at least $550 in wages. Contributions to the SEP IRA accountare normally completely tax deductible.

What Is A Roth IRA – And Why Do You Need One?

Self Directed IRA Store — Sun, 20 Mar 2011 14:37:14 +0000

What is a Roth IRA? A Roth IRA is an individual retirement account that holds investments. The Roth was created in 1997 to help middle class Americans get ready and save for their retirement years. The Roth IRA was announced as part of the Taxpayer Relief Act, and is named for the late Senator William Roth of Delaware. This IRA is not tax-deductible, but offers far more flexibility than a Traditional IRA. There are qualifying rules based on income to be eligible for the Roth IRA: for single filers, a modified gross income of no more than $120,000 and for married filing jointly not to be more than $167,000. Contribution limits are topped at a yearly $5000 cap, with a “catch-up” allowance of an additional $1000 for people above the age of 50 years old. After a Roth IRA is in existence for a period of five years, both the contributions and the earnings in the account may be withdrawn free from taxation or penalty. What is a Roth IRA? It is the form of account that holds investments, not the actual investments within. If the Roth IRA is self-directed, the account owner has increased investment options beyond the traditional stocks, bonds, and mutual funds, and could choose various tangible investment assets including precious metals and real estate. Remember, with a Roth IRA contributions are made with after-tax money , so the transactions within the IRA have zero tax impact and distributions are made tax-free. The account owner can start taking distributions at age 59 ½ years old, as long as the account has been open for five years, but in contrast to other IRA’s, the Roth IRA does not require distributions to start by age 70 ½ years old. This flexibility lets individuals who might not need the disbursements for retirement to continue funding the account and growing earnings in the Roth’s tax-free environment. Many investors decide to continue funding the Roth IRA and leave it as a legacy for their heirs. Assuming that tax rates could increase in the coming years, investing in a Roth and paying taxes on contributions now should be an advantage, anticipating a higher tax rate at retirement age when distributions begin. What is a Roth IRA? It’s a tax-advantaged program used to prepare for retirement.

SEP IRA Tax – Recognize the Advantage

socialoomph — Sun, 20 Mar 2011 04:44:20 +0000

Are theresolid tax benefits to a

Source: sep-ira-tax-recognize-the-advantage/2011/03/”>SEP IRA Blog

Benefits for Retirement – What Is a Roth IRA

Self Directed IRA Store — Fri, 18 Mar 2011 14:35:18 +0000

Individual Retirement Accounts provide either a tax-deferred or tax-free way for individuals to save for their retirement years. What is a Roth IRA? It is an account to hold investments, created in 1997 as a result of the Taxpayer Relief Act, and named for its sponsor, the late Senator William Roth. The Roth IRA is special . Rather than granting the tax break for money placed in the account, the tax break occurs when the money is taken out . In other words, the Roth IRA is not tax-deductible when contributions are made. A Roth IRA that is seasoned for a five year period allows both contributions and investment earnings to be withdrawn with no taxation or penalty for an owner at least 59 ½ years old. The Roth IRA does not mandate required withdrawals to begin at age 70 ½ years old as other types of IRAs do, so the account owner could choose to continue funding the account indefinitely. And no matter how much money the account earns over those years, it is all tax free. There are specific financial qualifiers to be eligible for a Roth IRA, and contributions are capped at $5000 annually , with a catch-up exception allowed for persons 50 years old and older that allows an extra $1000 annual contribution. What is a Roth IRA? It is possibly the most flexible individual retirement account, particularly for owners who select the self-directed Roth IRA. The self-directed Roth hands more control to the account owner, who can select the custodial firm and take advantage of non-traditional investment options for their account, including real estate, tax liens, or even gold and silver. The Roth IRA provides tax shelter for building retirement wealth . Contributions to the Roth are taxed as regular income for the year the contribution was made. The payoff occurs as the account seasons and the earnings grow tax-free, with the big advantage at retirement when the account holder has access to the money completely tax free.What is a Roth IRA? It might be the right plan for growing retirement wealth!

SEP IRA Tax – Find Out the Rules

socialoomph — Fri, 18 Mar 2011 04:45:41 +0000

A Simplified Employee Pension plan, generally referred to as a SEP, is a retirement plan established by employers and the self-employedindividual that is also suitable for sole proprietorships, S and C corporations, LLCs, and partnerships. The SEP is an IRA-based account into which employers can make tax-deductible contributions for the benefit of theireligible employees through [...]

Source: sep-ira-tax-find-out-the-rules/2011/03/”>SEP IRA Blog

What Is an IRA – Securing Your Future

Self Directed IRA Store — Thu, 17 Mar 2011 14:33:52 +0000

What is an IRA? An IRA is an Individual Retirement Account, and provides the account owner with either a tax-deferred or tax-free way of saving toward retirement. There are several different kinds of IRAs, and deciding which is ideal for a person depends on their particular situation and retirement needs . An IRA is simply a savings plan with certain restrictions. In a Traditional IRA, the account owner defers paying taxes on the contributions and earnings from these savings until the money is withdrawn . Funds cannot be distributed until the owner reaches age 59 ½ years old, and any early withdrawal prior to that is subject to a tax penalty. Every individual retirement account has its own tax implications and standards for eligibility. In a Roth IRA, contributions to the account are made with after-tax money so all transactions within the account has no tax repercussions for the owner. Distributions from the Roth IRA are tax free, as long as the owner has reached age 59 ½ and the account has been seasoned for five years. Rather than giving a tax break for IRA contributions, the Roth IRA provides the advantage at distribution , and helps the investment profits grow tax free in the account . What is an IRA? It’s JUST the account that holds the investments. So choosing a Traditional IRA, a Roth IRA, a SEP IRA or any other type of individual retirement account will depend on the investor and their retirement goals . Many people choose either a Roth or Traditional IRA, but opt for the self-directed option. A self-directed IRA puts the most control in the hands of the account owner, who makes the critical decisions for the plan. With a self-directed IRA, the owner decides on the custodian firm to hold the account. Frequently they decide on a custodian with experience in alternative investments, providing non-traditional choices beyond the conventional stocks, bonds and mutual funds to include tax liens, real estate and real estate notes, even gold and silver . The custodian firm makes investments at the direction of the account owner, and on the owner’s behalf.