A Roth IRA is a retirement account that is slightly different than other IRAs. The primary reason is because the money placed into a Roth IRA is taxed, but money withdrawn has no tax. Traditional IRAs are taxed when funds are withdrawn, not placed into the account.
Rules for a Roth IRA to be tax free are if the fund has been open for 5 years on principal withdrawals, and the individual is 59.5 on withdrawals on the growth portion above principal. Listed below are a few of the major advantages as well as disadvantages to having a Roth IRA.
The advantages to a Roth IRA include Roth IRA conversions from traditional IRAs. If there is money in a Roth IRA due to conversion from a traditional IRA, then the owner can withdraw the total amount of converted funds without penalty. This is as long as the seasoning period has passed, which is currently five years.
Also if an owner of a Roth IRA dies, then the heir to the plan can receive the funds while also holding their own Roth IRA. Even better, the beneficiary can combine their Roth IRA with the deceased with no penalty. Thus a single plan is created for the heir to benefit from.
Some of the disadvantages to a Roth IRA include, if a person has a high income level it can phase them from being able to contribute to a Roth IRA. Unlike most tax deductible employer based plans which allow any income level to contribute funds. Also If a person has a Roth IRA plan and dies before the funds are distributed, then they never benefit from the tax cuts available.
Granted when the funds pass to an heir there is no time limit for when the funds have to be taken out. Unlike a traditional IRA which states that at the age of 70.5 by April 1st funds have to be withdrawn. Therefore in a Roth IRA if a person dies before they can realize the tax benefits, it really does not benefit the individual, but it is good for an heir.
E-filing the fastest way and easiest way to submit a tax return. Everyone is doing it. 99 million people in 2010 transmitted their tax returns electronically to the Internal Revenue Service. These 70% of the taxpayers know everyone should use this fast, easy service.
Starting in 2011 both the people who pay taxes and those who prepare taxes will see an important change. As of January 1, 2011 people who are paid to process 1040s must be qualified to submit these returns by e-file. Volunteers are exempt. Anyone requiring more information can find it at the IRS website.
Taxpayers should try electronic filing. Fewer people mail their tax returns or prepare paper 1040s every year for a good reason.
Electronic filing is safer and protected. Within two days the IRS notifies the taxpayer the documents had been received. If there is an error, the 1040s returned for corrections.
E-filing= Quicker Money & More Ways To Get It
By combining e-filing and direct deposit, taxpayers can get their refund in as little as 10 days. Almost 75% of the returns have refunds. $2900 was the average amount overpaid.
Taxpayers can choose the option they want with e-filed returns. Those who file early can pick a withdrawal date up to April 15. Taxpayers can pay by a mailing a check with a voucher or by credit card.
E-file Gets It Done
There are three ways to e-file. Tax preparers can do it for their clients. Commercial software for preparing tax returns can automatically send it. A free taxpreparation and filing service called Free File is available online. Or at the IRS website.
As the number of people preparing taxes on their own computers is growing, there are a number of software programs designed to assist. One of these is Free File which asks simple, clear questions and helps people navigate through complex issues by the answers provided. However the return is prepared, E-file is the way to go.
There is no other move that can help you increase your money than making an investment. In today’s economic situation, it is always wise to make savings and increase them through wise investment. One of the main reasons why some people lose their savings is that, they failed to invest their money in a right place. As a result, they decided to sell everything they own to make ends meet. You should not be like them. So if you have a stable job and business, think of investing in Roth Individual Retirement Account (IRA), which is more flexible compared to traditional IRAs. Roth IRAs allow you to decide where you should put your money by just following some of the Roth IRA rules. In other words, you can invest your money wherever you want. This would ensure that your money is invested in the right place. Now, the issue here is where to invest your IRA and what are the best IRA providers.
One of the safest investment available is the real estate. You may ask why? Because there are many properties out there which are priced below their former maket value. So when you invest in real estate, your money and profits will double in a couple of years. This would help increase your retirement savings and prevent them from becoming static. Now that you decide to put your money in real estate business, it is time to find an agent which will help you in every investment transactions. This agent will also act as a mediator between you and the market. So if you have an agent, nothing to worry about what is going on in the market because he will take care of your money. There are many agents which offer the best investment services, They are banks, financial institutions, brokerage firms and investment companies. You can choose which is the best for you. Since these institutions have their own weaknesses, you should make a comparison and determine which one is the best for your need.
Getting an IRA is as importance as taking care of your health. You should always remember that retirement is your time to enjoy every single minute with your family and friends. Thinking for financial matters should not be your concern once you retire. If have enough money in your account, you can enjoy the best what retirement years can offer. The key is to start investing your IRA in real estate. Your future lies on your hands.