IRAs Flashcards
(20 cards)
What is the Traditional IRA deductibility phaseout range for a single, active participant in 2024?
$77,000–$87,000.
What is the Traditional IRA deductibility phaseout for married filing jointly (both active) in 2024?
$123,000–$143,000.
What is the Traditional IRA deductibility phaseout if only the spouse is active in a plan (MFJ) in 2024?
$230,000–$240,000.
What is the Traditional IRA deductibility if neither spouse is an active participant?
No AGI limit; fully deductible.
What is the Roth IRA contribution phaseout for single/head of household in 2024?
$146,000–$161,000
What is the Roth IRA contribution phaseout for married filing jointly in 2024?
$230,000–$240,000.
What is the Roth IRA contribution phaseout for married filing separately in 2024?
$0–$10,000
What is the combined annual contribution limit for IRAs (Traditional + Roth)?
The IRS sets a combined annual limit ($7000 2024/2025). After age 50, there is an additional $1000 catch up contribution
What income qualifies for IRA contributions?
Earned income (wages, salary, self-employment); spousal contributions allowed if one spouse has no earned income.
What is the tax treatment of investment growth in IRAs?
Tax-deferred growth.
When is the IRA contribution deadline for a tax year?
The tax-filing deadline of the following year (usually April 15).
Name the four standard 10% early withdrawal penalty exceptions for IRAs.
Age 59½ or older, death or disability, higher education expenses, and irst-time home purchase (up to $10,000)
List all standard 10% early withdrawal penalty exceptions for IRAs.
Age 59½ or older
Death or disability
Substantially equal periodic payments (SEPP)
Medical expenses >7.5% of AGI
IRS levy
Higher education expenses
First-time home purchase (up to $10,000)
Health insurance premiums (if unemployed)
Adoption expenses
Qualified reservist distributions
What new penalty exceptions did the SECURE 2.0 Act (2022) add?
Qualified federally declared disasters: Up to $22,000, ratably over 3 years, can be repaid within 3 years
Domestic abuse: Lesser of $10,000 or 50% vested balance, can be recontributed within 3 years
Emergency personal expense: Up to $1,000 per year, repayable within 3 years, no additional distributions during that period unless repaid
What is the first-time home purchase exception for IRA withdrawals?
Up to $10,000 penalty-free.
How do you calculate the deductible portion of a Traditional IRA contribution in the phaseout range?
Reduction = Contribution Limit × (AGI – Lower Limit) / 10,000
Give an example of calculating partial deductibility for a single participant in the phaseout range.
If AGI is $80,000, phaseout is $77,000–$87,000, use the formula to find deductible amount.
What is the difference between Traditional and Roth IRA tax treatment?
Traditional: Contributions may be deductible, withdrawals taxed.
Roth: Contributions not deductible, qualified withdrawals tax-free.
What new rollover option did SECURE 2.0 introduce between 529 plans and Roth IRAs?
Beginning in 2024, certain unused 529 plan funds can be rolled over to a Roth IRA for the beneficiary, subject to lifetime and annual limits.
What are the new Required Minimum Distribution (RMD) rules for Roth accounts starting in 2024?
No RMDs are required from Roth 401(k), Roth 403(b), or Roth 457(b) accounts, aligning with Roth IRAs.
