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Though set up to help regular people save, IRAs are fraught with complicated tax rules. Missteps can be made without the owner knowing it until it is too late to correct the problem. The result often is higher taxes and penalties. Sometimes the result is reduced IRA options. Here are some little-known but very common […]
Most people who are busy accumulating large balances in their IRAs and 401(k)s forget that the IRS holds a mortgage on those accounts. You put pre-tax dollars in the accounts and let income and gains compound tax deferred. But that balance in the IRA is not all yours. The price for those tax breaks is […]
With today’s tricky tax law, the account in which you hold an asset can be as important as which assets you own. Unfortunately, too little attention is paid to the issue of which accounts should hold which investments. Most of us have more than one type of investment account: 401(k)s, traditional IRAs, Roth IRAs, taxable […]
President Bush signed the new bankruptcy law, which we gave advice notice about in last month’s visit. Here are details of how the final law applies to pensions and IRAs. Retirement funds are exempt from the bankruptcy estate if they are exempt from federal income tax under tax code sections 401, 403, 408, 408A, 414, […]
Individual Retirement Accounts are a long-standing and well-known part of the tax code. Yet, distributions from IRAs are one of the most misunderstood sections of the code. The situation is further complicated because the rules changed in recent years. There still are people – even financial professionals – who follow the old rules. Mistakes about […]
Many IRAs charge a wrap fee that includes money management, account maintenance, and perhaps other costs in one annual or monthly fee. A recent IRS private ruling states that many of these wrap fees can be paid with money outside of the IRA without the payment being treated as an additional contribution to the IRA. […]
Many aspects of retirement planning changed over the last decade. One piece of conventional wisdom that has endured is to maximize contributions to IRAs and 401(k) plans. I’ve questioned that in the past, and it is time again to question this advice. IRAs and 401(k)s are tax shelters. Changes in the tax law alter the […]
Does your IRA have to be invested in publicly-traded securities or mutual funds? Few people realize that the answer is “no.” The IRA actually is one of the most flexible investment vehicles available. An IRA can be invested in real estate, private companies, hedge funds, separately managed accounts, mortgages, and a host of other assets. […]