1 / 20

IRA Provisions Tax 1 Chap 9 Tax 3 - Chap 20 (indivs text)

IRA Provisions Tax 1 Chap 9 Tax 3 - Chap 20 (indivs text). (A) Taxpayer Relief Act of 1997. (1) Phase out of IRA deduction. effective after 1997 Active participant in ER plan; - no longer include indiv whose SP cov’d; - still a phaseout: But 150,000 - 160,000

diallo
Télécharger la présentation

IRA Provisions Tax 1 Chap 9 Tax 3 - Chap 20 (indivs text)

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. IRA Provisions Tax 1 Chap 9Tax 3 - Chap 20 (indivs text) (A) Taxpayer Relief Act of 1997

  2. (1) Phase out of IRA deduction • effective after 1997 • Active participant in ER plan; - no longer include indiv whose SP cov’d; - still a phaseout: But 150,000 - 160,000 • For active participant - new phaseouts:

  3. MFJ Phaseout 98 50-60 99 51-61 00/01 52-62/53-63 02/03 54-64/60-70 04/05 65-75/70-80 05/06 70-8-/75-85 07 80-90 Single Phaseout 98 30-40 99 31-41 00/01 32-42/33-43 02/03 34-44/40-50 04 45-55 05 50-60

  4. (2) Roth IRA (Sec 408A) • Effective after 1997 • nondeductible contrib • up to 2000 (w/o consid of active partic rule) • No mand distribs (B4 death) • Contribs allowed even >70 1/2 • Phaseout 95-110 single, 150-160 MFJ

  5. After 5 yrs - distrib w/o tax or pen - (no tax on growth, nondeduc contribs returned) • 1) 59 1/2 • 2) to B after death • 3) disabled • 4) 1st time homebuyer - 10,000 limit (all IRA’s now except educ IRA)

  6. Other distrib > contribs - incl’d in GI + 10% early w/d Pen • Rollover from existing IRA; - not if AGI > 100,000 or MFS; - include (gen) amt taxable if w/d; B4 ‘99 include ratably over 4 yrs; - no early w/d pen • Total contrib limit all IRA’s 2000 (b4 phaseouts)

  7. (3) Educ IRA’s • Begin 1998, nondeduc 500/yr per B (under 18), 2000 after 2001 year • Non deduc 500/yr per B (benefit) (under 18) • Distribs - Qualif’d educ exps, <30 - excld’d B GI (exclus) • May rollover - to educ IRA of diff fam B - tax & pen free • Otherwise - distrib at age 30 - earnings taxable + 10% pen

  8. Cannot claim hope or life long Lrng credit same year as exclus • contrib = gift of pres int • Phaseout - mod AGI 95-110 single, 150-160 MFJ • Qualif’d educ exps - post second ed - tuition, fees, rm & bd; - at least 1/2 time for rm & bd

  9. (4) Pen free w/d IRA for higher ed exp (all IRA’s) • 10% pen early w/d not apply; TP, SP, child, GC; Qualif’d higher ed exp; - post second ed - tuition (CCH) fees, bks, supps, rm & bd; - includes grad ed (per comm report); - reduced by exclusions (Schol, svgs bonds, educ asst prog) (not - gift, inherit) • After 97 - exps pd after 97 for acad periods beg after 97

  10. IRS Restructuring & Reform Act of 1998 - Roth IRA & Educ IRA • Chap 20 (indivs text) - Roth IRA • Roth IRA - inc recog on rollover • trad IRA rollover to Roth - include in GI • full amount - deductible trad IRA • earnings - nondeduc trad IRA • prior law (97) conversion b4 99 (=98) - recog GI ratably over 4 yrs (beg 98)

  11. New law (98) option • recognize ratably over 4 yrs or • include entire amt current yr (election) • cannot change election after due date (normally 4/15/99) (extension?) • Restrictions under 4 year spread

  12. W/d of any converted amt = GI (when w/d) • recog max = w/d (?) • death of t/p accels recog unless surv sp inherits and surv sp elects same 4 yr period • this elec also irrevocable (after dec’s last return due date) • Effective - taxable years after 12/31/97

  13. Roth IRA - AGI limit on rollover to Roth from Trad • AGI limit 100,000 (97 law) • 100,000 limit not include GI from conversion rollover (trad to Roth) (98 law) (Relief Act (98 also) did not enact MFJ limit of 150,000 by 2004) • Effective - taxable years after 12/31/97

  14. Roth IRA - AGI limit on rollover • 100,000 limit not include req’d min distribs from IRA’s for indivs at 70½ yrs (min distribs not eligible rollover, still in GI) • Effective - taxable yrs after 2004

  15. IRS Restructuring & Reform Act of 1998 • Chap 20 (indivs) & Chap 9 • Educ IRA’s (clarifications on 97 law) • all distribs - ratable share of prin & earnings • Excess contrib - if remain in acct, 10% excise tax (pen) • treated as distrib’d - w/i 30 days after B reach 30 yrs or dies

  16. Rollover (tax free) (of Educ IRA) (3 Reqs) • to another educ IRA • upon death or age 30 of B • to new B = member of former B’s family (& under 30)

  17. Increased Traditional IRA Contributions Limits EGTRRA ‘01 • 2002 – 2004 3000 • 2005 – 2007 4000 • 2008 & later 5000

  18. Additional Traditional IRA (Catch up) Contribution EGTTRA ‘01 • Age 50 (by end of tax year) • 2002 – 2005 additional 500 • After 2005 additional 1000

  19. Modification Educational IRA Rules EGTRRA ‘01 • 2000 instead of 500 limit • mfj phase out 190 – 220 • Elementary & secondary school expenses included • Can claim HOPE or Lifetime Lrng same year but not same expenses • Corps can contribute regardless corp income and w/o phase out • Effective after ‘01

  20. New Credit – Contributions to IRA’s & Certain QRP’s • 2000 credit limit • Reduced by taxable distributions (current year, 2 hrs prior, & up to due date • Phase out AGI 25 (single) 50 (mfj) • In addition to any exclusion or deduction • Against regular tax & AMT • Not dependents or full time students • Calculated per table • Effective: after ’01 and before ‘07

More Related