The Tax Questions Blog

Posts Tagged ‘are roth ira contributions taxable’

Retirement Plans & Investments : Taxation of Nondeductible IRA Contributions

Question: if someone wants to roll overtheir 401k into a roth ira?

if someone wants to rollover their 401k into a roth ira their pretaxed 401k money will have to be turned into after taxed money durring the rollover to the roth ira. Is this money going to be taxed at the normal income tax rate for the individual so if you are in a 15% tax bracket would it be taxed at 15%. Or is it going to be claimed as ordinary income at the end of the year and taxed accordingly, in which case would be 50,000 salary plus 120,000 rollover would equal a taxable income of 170,000 which would equal a 35% tax bracket.

The money needs to be put in a roth ira because the preffered tax deffered retirement vehicle is a matching 401k so a traditional ira is not a option as the 401k will be kept to receive the employer contribution

Answer: You'll get better access to people who can answer this question if you put in in the Taxes category.

Your 401(k): A vested interest

Question: My company's 401(k) vesting period is longer than I plan to stay at my job. Should I still invest in my 401(k) knowing that I will not receive any employer matching? - Andrew, West Palm Beach, Florida Answer: The short one is, Yes, you should still contribute to your 401(k) account even if there's [...]

"Gold Plated Health Care" Tax Glenn Beck's Employees get screwed by the government

Question: What is the difference between non-deductible IRA contributions and contributions to a regular taxable account?

If you make contributions to a traditional IRA which are not tax-deductible for whatever reason, how is this any different from contributing post-tax dollars to a regular taxable account? I thought the only difference was that IRA contributions were tax-deductible. In the case of IRA contributions which are not tax-deductible (due to income limits, e.g.), what is the advantage of an IRA?

Answer: any earnings in the IRA are tax deferred (until withdrawal). This includes the earnings on the non-deductible contributions. The accounting gets messy though because the amount you take out during requirement is only taxable to the extent that you never paid tax on it before. In other words when you withdraw the non-deductible contribution is comes out of the IRA tax free because you already paid the tax on it. The amounts you contributed pre tax and the earnings get taxed upon withdrawal.

Amend Internal Revenue Code of 1986 to increase maximum taxable income for 15% rate bracket, provide partial exclusion from gross income for dividends ... deduction, increase IRA contribution limit. $9.56 The BiblioGov Project is an effort to expand awareness of the public documents and records of the U.S. Government via print publications. In broadening the public understanding of government and its work, an enlightened democracy can grow and prosper. Ranging from historic Congressional Bills to the most recent Budget of the United States Government, the BiblioGov Project spans a wealth of gover...

Income limit lifted, opening Roth IRA conversions to all

Hillsborough resident Rick Smith likes the idea of converting a traditional Individual Retirement Account into a tax-free Roth IRA, but until this year, he and other higher-income taxpayers did not have that option. Now they do, thanks to a change in the tax code.

Gold and Silver Bullion: Yes! Your American Silver and American Gold Eagles Can Fall into Taxation!