How a Roth IRA Totally Screwed Up My Taxes

daliclockThe clock was ticking down to tax day when I realized that I made a huge mistake. I had picked a retirement investment a year earlier thinking I was being proactive about the future, but it was about to bite me back on April 15, and take a serious toll on my bank account.

As a millennial who’s also a journalist, I don’t have any illusions that a yacht or private island await me in retirement. I was always told that saving now gave me the best chance of having a substantial income once I no longer work. And why not do it while I don’t have the financial burden of a mortgage or children?

So when a job change last year gave me the chance to decide what to do with my old work-sponsored 401(k), I decided to convert the amount I had previously accumulated to a Roth IRA. Such investment vehicles require savers to pay taxes now but then savings can grow tax free so you aren’t paying taxes when you pull the money out in retirement, like you otherwise would with a traditional IRA. I figured that paying the taxes now, rather than later in life, might mean I pay while I’m in a lower bracket than I might be at the end of my career. Continue reading

IRA Rollover Ruling Stuns Advisers and Savers

Retirement experts call it a game changer for the 50 or so million households in the U.S. that own an individual retirement account — an IRA.

IRAApril 4, 2014 – Uncle Sam’s Tax Court just ruled that the one-rollover-per-year rule applies to all of a taxpayer’s IRAs rather than to each IRA separately. And that ruling, say experts, is in direct conflict with IRS Publication 590, the bible for IRAs.

“Industry leaders, financial advisers, and everyone else who handles IRAs are stunned,” said Denise Appleby, the editor and publisher of The IRA Authority

According to Appleby, there are two ways to move money between IRAs. Continue reading

Precious Metals IRAs … A Primer

So, you’re thinking about adding precious metals to your retirement funds. Perhaps you have already been buying gold or silver for your other investment accounts or maybe this will be your first venture into precious metals investing.

precious_metals_iraOf course, you could just purchase gold, silver, platinum or palladium, store them separately, and mentally earmark them “saved for retirement.” But a more reasonable option might be to take advantage of the tax benefits available through the use of self-directed IRAs and self directed “Roth” IRAs. You can learn more about these benefits by conducting Internet research. The specific language pertaining to investing IRA funds in precious metals can be found in Section 408(m)(3) of the Internal Revenue Code. Continue reading