Track Any Stock Instantly
Just enter up to ten of your stocks in the Stock Tracker box, click the ADD
button beside any of Today's Hot Stocks, or click ADD beside any of the stocks
you've Recently Viewed.
Click ADD next to any stock below to add it to the Stock Tracker
IRA
Introduction to IRAs and Distribution Options
by InvestorGuide Staff (Write for us!)
(Click on the links within the article to get definition of that word)
Annual contributions are tax-deductible if certain IRSrequirements are met. A participant can only contribute to an IRA if there is no 401(k) plan or other employer-sponsored retirement plan. Contributions are dependent on a participant's annual gross income (AGI), but in general, there is a limit of $3,000 a year for single participants and $6,000 for married couples. Single participants will be eligible for the deduction if they earned less than $50,000 and married participants will be eligible if their jointincome was less than $70,000. Contributions can be made for a particular year until April
15 of the following year.
In the case of married couples, a surviving spouse can take over the deceased spouse's IRA and continue the tax deferral. All other beneficiaries have to take the distributions from an Inherited IRA, distributions which are subject
totaxation. There are a couple of options on the distributions:Lump Sum
Following the five-year rule, a beneficiary may take the amount in the IRA without penalty no later than December 31 of the fifth year after the IRA owner died. The beneficiary can keep what is left of the money after paying ordinaryincome taxes.
Little-by-little
IRA distributions paid over the beneficiary's life expectancy; the annual distributions are subject to taxation. This option must be selected no later than December 31 of the year following the IRA owner's death. If the money is not withdrawn then the five-year rule will apply.
How to use this tool 
How to use this tool 
Print Article
Cite this article
