IRA do’s and don’ts for 2019

The end of the year will be here before you know it. Consider making the following IRA tips into New Year’s resolutions and start 2019 on the right foot. NOTE: If you’re interested in starting a traditional 401(k), profit-sharing, or pension plan for year 2018, Azzad’s deadline is December 1). Check IRA and employer plan beneficiary forms. If you got married or had a birth, adoption, or death in the family in 2018, your retirement plan beneficiary forms may need to be updated. Take the new year as a reminder to look at the beneficiaries on your plans and make sure they’re the ones you intend. Don’t forget contingent beneficiaries. Although they’re often overlooked, contingent beneficiaries are critical. They generally inherit the retirement plan if the primary beneficiary passes away before the retirement account owner. You should always have both a primary and contingent beneficiary named on your retirement accounts. Review 2018 distribution reporting. Most IRS reporting will be done in January 2019 for 2018. Check all Forms 1099-R for accuracy. Mistakes are not uncommon. There still may be time to correct these forms if the mistakes are caught early enough. Make sure you receive your notification about RMDs for the upcoming year. If you’re 70½ or

November 2, 2018 No Comments

The cost of not tracking your IRA contributions

Do you know how much you’re allowed to contribute to your IRA each year? Are you periodically tracking your deposits? Contributing more than the permitted amount can result in costly penalties. Fortunately, there are ways to fix it. How can it happen? Let’s look at a hypothetical example. In 2016, Ahmad, age 51, set up monthly automatic bank deposits to his traditional IRA that totaled $8,500. However, the IRA contribution limit for 2016 is $5,500, with a catch-up contribution for individuals over 50 of $1,000, for a total of $6,500. Although we believe automatic deposits are the best way to invest for your goals, it’s also an easy way to unintentionally contribute too much to your IRA. You may also end up with an excess contribution if you contribute to a Roth IRA and later discover that your modified adjusted gross income (MAGI) was above the Roth IRA income limit. And because you’re not allowed to deposit money into a traditional IRA for the year you turn 70½ or later, forgetting to turn off automatic deposits or continuing to contribute past that age will also count as excess contributions. Roth IRAs have no age limits for contributions. What can you

April 3, 2017 No Comments

10 frequently asked questions about IRAs

1- When is my IRA contribution due? Your traditional and Roth IRA contribution must be made no later than April 18. If you make your contributions in year 2016, make sure your financial institution reports the deposit for year 2015. Your SEP IRA contribution for year 2015 isn’t due until you file your tax return (that could be as late as October 15 if you file an extension). 2- How much can I contribute to an IRA? The IRS may annually adjust contribution maximums. 3- How do I report my Roth IRA contributions? Roth IRA contributions are not tax reportable nor are they deductible from your income. Your financial institution will report the contribution to the IRS on form 5498 in late May. However, you must report a Roth IRA conversion on your 1040 form (using information provided to you on the 1099-R form). Keep in mind, you’ll owe taxes on the taxable part of the Roth IRA conversion in the year you make the conversion. 4- How do I report my deductible traditional IRA contribution? You report your deductible IRA contribution on your personal tax return 1040. 5- Why does my tax professional insist my traditional IRA contribution was

February 2, 2016 No Comments