Tax Time IRA Questions ... And Our Answers | Ed Slott and Company, LLC

Tax Time IRA Questions ... And Our Answers

By Beverly DeVeny, IRA Technical Expert

Follow Me on Twitter: @BevIRAEdSlott

It's tax time - and we've covered a lot of key planning issues during our Tax Planning Week (click here to read all of that advice.) Here are some responses to other key IRA questions that come up a lot at tax time.

Q. Can I do a conversion now for 2013?
A. No. In order to have a 2013 conversion, the funds must leave the IRA or plan account in 2013. They don’t have to be in the Roth IRA in 2013 since you can take a withdrawal in December, 2013 and have 60 days to complete a rollover (conversion) to the Roth IRA in January or February, 2014. But the funds must leave the traditional IRA or the employer plan by December 31, 2013.

Q. I am contributing to my employer plan. Can I also make an IRA contribution?
A. Yes. As long as you have earned income or compensation and will not be 70 ½ or older during the year, you can make an IRA contribution. If your income exceeds certain limits you may not be able to deduct the contribution.

You can also make a Roth IRA contribution even if you are 70 ½ or over unless your income exceeds certain limits. You can find all of those limits at IRAhelp.com/2014.

A contribution can also be made for a non-working or lower wage spouse based on your earnings subject to the income limits noted above (known as a spousal IRA contribution).

Q. I was told I can still set up a SEP IRA for 2013 and fund it up to October 15th. Is this right?
A. Yes. As long as you meet the criteria for establishing an employer plan, you can establish and fund a SEP IRA up to the tax filing deadline, plus extensions, for your business. We examined that issue in more detail here.

Keep in mind that if you have any employees, including your spouse, whatever contribution is made to your SEP must also be made for any eligible employees. You cannot fund just your own account.

Q. Deb died last year. She had earned income. Can we make a contribution to her IRA or Roth IRA account for last year?
A. No. You can only make a contribution for someone who is alive. The theory behind this is that if someone dies during the tax year, they no longer have a need to save for retirement.

 

Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner

 


Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to matt@irahelp.com for approval.

For white papers/other outflow pieces:
Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC - depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:
Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:
Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at matt@irahelp.com or (516) 536-8282 with any questions.

 

Find members of Ed Slott's Elite IRA Advisor GroupSM in your area.
We neither keep nor share your information entered on this form.
 

I agree to the terms and services:

You may review the terms and conditions here.