It is important to note that those with both deductible IRAs
and nondeductible IRAs cannot choose to roll over only the nondeductible amounts.
Tax-deferred accounts include deductible IRAs
and 401(k) type accounts.
Among the federal income tax changes explained in the Special Report are: -- A new private mortgage insurance (PMI) deduction for homeowners -- Higher personal and dependency exemptions -- Higher income limits for deductible IRAs
and Roth IRAs -- Increased Section 179 expense deduction for business owners -- Bigger health care deductions -- Increased contribution limits for 401(k) plans --Tax relief for foreclosures
Federal deficits, public policy on Social Security, allowing deductible IRAs
or closing those "loopholes" all have an effect.
Includes defined-contribution plans, profit-sharing plans, 401(k) plans, 403(b) plans, 457 plans, Keogh plans, Simplified Employee Plans (SEPs), SIMPLE plans and deductible IRAs
For example, it increases the maximum income phase-out levels for deductible IRAs
to between $80,000 and $100,000 of AGI for joint filers and $50,000 to $60,000 for single filers.
Perhaps these excess funds can be used for deductible IRAs
, stock options, Sec.
In addition to accelerating the IRA limit to an immediate $5,000, the legislation will speed the gradual increases in income eligibility for traditional deductible IRAs
enacted as part of the 1997 taxpayer relief act.
As deductible IRAs
, the tax basis is zero since contributions were deducted in arriving at AGI.
With these accounts (which should be kept separate from any deductible IRAs
you may have), you can't deduct the contribution, but the growth continues to be deferred from taxes until you withdraw the money.
Expand IRA contribution limits to $5,000, speed up increases in eligibility for traditional deductible IRAs
, and eliminate the marriage penalties for IRAs and Roth IRAs.
For deductible IRAs
contribution amounts and their earnings, as well as earnings on nondeductible contributions, are included in the taxpayer's gross income.