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| Funding an IRA (either traditional or Roth)
makes good sense! You can fund your 2006 IRA until April
15, 2007. Come in and see us or call us today and find out
how an IRA can add up to financial security for you!
Contribution Limits:
Tax Year Standard
Limit
Catch-up (over 50)
Total Contribution (over 50)
2006-2007
$4000
$1000
$5000
2008
5000
1000
6000
2009 &
5000+COLA
1000
6000+COLA
thereafter |
| ROTH |
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The Taxpayer Relief Act of 1997 created
Roth IRAs which are nondeductible accounts that feature
tax-free withdrawals for certain distribution reasons after
a five-year holding period.
Not all individuals will qualify to
contribute to a Roth IRA. In order to contribute to a Roth
IRA, an individual must meet certain eligibility
requirements. Regular, spousal, rollover, transfer,
recharacterization, and conversion contributions can be made
to a Roth IRA.
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| Traditional |
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In 1974, the Congress established
traditional IRAs to encourage individuals to save money for
their retirement. The benefits of investing in a
traditional IRA include tax-deferred earnings and, for many
people tax deductibility.
To make a traditional IRA contribution,
an individual must meet certain age and compensation
requirements. Individuals can make regular, spousal,
simplified employee pension (SEP) plan, rollover, direct
rollover, recharacterization, and transfer contributions to
their traditional IRAs.
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| Simple |
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The Small Business Job Protection Act
of 1996 created the Savings Incentive Match Plan for
Employees of Small Employers (SIMPLE). The employer can
adopt a SIMPLE as either a modified 401(k) plan or as a
unique plan that uses special SIMPLE IRAs to accept
contributions. A SIMPLE IRA plan is an employee salary
deferral plan that requires a limited employer
contribution. Although it is like a 401(k) in operation, it
is easier because it does not require special discrimination
testing or complicated reporting.
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| Simplified Employee Pension
(SEP) |
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A simplified employee pension (SEP)
plan is a business retirement plan that uses traditional
individual retirement accounts (IRAs) as the investment
vehicle. The employer contributes money to their employees’
traditional IRAs (sometimes called SEP IRAs). The employer
gets a tax deduction, and the contribution is not taxable
income to the employee until they take a distribution from
the IRA.
The employer is responsible for
ensuring that the plan is established and administered in a
proper manner, in order for the plan to maintain its
tax-deferred status.
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