"Tom" <yahoo[at]earthlink.com> wrote:

- quote -

The 2007 limit is $4,000 ($5,000 if you're age 50 by the end of the year.
In 2008 the limits go up $1,000.

With any IRA you can take any money out of it you want at any time, but
there may be tax consequences, depending on your specific situation.

Instead of asking people here to rewrite the IRS Publication, please spend
some time reading it (Pub 590), then come back with questions if there's
some specific detail you don't understand. A clue to whether you've done
your homework is whether you provide enough information about your specific
situation for someone to answer you question rather than having to come back
with a ton of questions.
--
Phil Marti
Clarksburg, MD

"Phil Marti" <prm20871[at]verizon.net> wrote in message
news:5Yy2j.6840$Mr.5425[at]trnddc04...
- quote -

I'm still working. How much casn I contribute per year and can I make
withdrawals at anytime of contributions and profits? If I deposit money
into a ROTH and w/d the profits before the five year window what is the
penalty?
- quote -

Yes, I'm covered by CSR retirement and I have a supplemental TSP account.
- quote -

Sorry for the misunderstanding I'm still working for the Feds.
- quote -

In article <IXn2j.13971$281.5187[at]trndny06> , "Tom" <yahoo[at]earthlink.comwrote:

- quote -

First, I am not a tax professional, but I try to point you in the right
direction, because you seem to have a basic misunderstanding of IRA's
that others that have answered, have not addressed.
- quote -

(OP is over 60 so all withdrawals are qualified)

All Traditional and ROTH IRA contributions are from after tax dollars.
If you qualify, you MAY be able to deduct your _traditional_ IRA
contribution from your Federal taxes which essentially makes it the same
as before tax dollars - but only if you qualify to take the deduction.

ROTH accounts are always after tax dollars, only the earnings grow tax
free. When you withdraw from a ROTH you pay no additional tax because
it has already been paid on contributions and the earning are not
taxable either.

Traditional IRA withdrawals, on the other hand, are taxed as ordinary
income -- except that any contributions that you have already paid tax
on, and could not deduct because you did not qualify for the deduction,
are not taxed again -- that is, for the sake of discussion, your "after
tax" contributions, or your "basis" as it is called. If you are still
employeed and are covered by an employeer retirement plan as you
indicate, then you are probably not qualified to take a deduction.

When you make non-deductable contribution you report it to the IRS on
form 8606 and also use that from to keep a running total of all previous
basis. You need to do that so that when you take a distribution, you
don't get to withdraw _only_ taxable or un-taxable dollars, rather you
have to withdraw some of each pro-rated and to do that you have to know
your total basis in the IRA.

- quote -

I have used TurboTax for years and it has all kinds of forms and help
for IRA contributions. If you used the "forms" method, just open form
8606-T (T= taxpayer for your self), for 8606-S (S=Spouse), and ask help
for instructions - it will lead you to the IRA contributation
worksheets, etc.

If you use the "interview" method, there is a whole section on
Retirement/IRA's, I don't know how you could have missed it.

- quote -

If you are talking about CD's that are within your IRA, there is no "tax
liability", until you take a distribution. Taxes on distributions from
you Traditional IRA are pro-rated using your basis (see above) and
distributions from your ROTH are tax free.

As far as you investments go, you are free to invest in anything you
want.

- quote -

Remember, when you become 70 1/2 you MUST start taking mandatory
distributions from your Traditional IRA, like it or not. This does not
apply to a ROTH. For that reason, depending you your circumstances, it
could be better to add to the ROTH with after-tax dollars, particularly
if you cannot deduct your Traditional IRA contributions.
- quote -

See above.

- quote -

deduct IRA contributions if the IRA is your ONLY retirement plan).

- quote -

Like I said above, at your age (younger than me), it might be better to
add to the ROTH because you won't be subject to mandatory distributions
at 70 1/2.

--
-Ernie-

"Arthur Kamlet" <kamlet[at]panix.com> wrote in message
news:fidbhu$r20$1[at]reader1.panix.com...
- quote -

Yes, that's what I need to know.

"Tom" <yahoo[at]earthlink.com> wrote:

- quote -

You can't do either unless you or your spouse is working and has "earned
income," a/k/a "taxable compensation." This term is explained in Chapter 1
of IRS Publication 590.

Contributions to a traditional IRA may be either deductible (pre-tax) or
nondeductible (after-tax). There are two issues in determining this:
coverage by a retirement plan and, if you are covered, your AGI.

The fact that you are receiving CSRS benefits does not mean that you are
covered by a retirement plan. Thus, if you're single and working, you can
make deductible traditional IRA contributions at any income level unless
you're covered by a plan at your current job. (The reason you couldn't
deduct while working for the gummint was that you were covered by a plan at
that time, and your income was too high.)

There are absolute income limits for Roth contributions. Those are
explained in Chapter 2 of Pub 590.

- quote -

When you take distributions from a traditional IRA that has after-tax money
in it you calculate how much is contributions that have already been taxed
and how much is earnings that haven't. You do this in Part I of Form 8606.

--
Phil Marti
Clarksburg, MD

In article <bko2j.2024$N67.1287[at]bignews5.bellsouth.net> ,
Harlan Lunsford <hnslunsford[at]bellsouth.net> wrote:
- quote -


One additional comment: If you were asking How do I report money
I put into a nondeductible IRA, the answer is Form 8606. If you
didn't file in the year you made the contribution, do it now.
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

"Harlan Lunsford" <hnslunsford[at]bellsouth.net> wrote in message
news:bko2j.2024$N67.1287[at]bignews5.bellsouth.net...
- quote -

The CDs are in a regular savings account and I want to traansfer them to an
IRA.
If I want to add cash to an IR do I add it has pretax money or post tax
money?
- quote -

Pretty darn good but I'm a dunce. Do you know anything about pre tax and
post tax IRAs?
Do I need to use post tax money or can I use pre tax money to deposit to an
IRA?
When I opened my IRAs and ROTH nobody really seemed to know the rules for
CSR Federal employees.
- quote -

OK, but I didn't use pretax money for the IRA so they're going to tax me
again on the deposits.
When I start a new IRA with my CDs then buy mutual funds they're going to
tax me on the deposits as well when I wthdraw the principal. correct?

- quote -

I don't think that'll apply to me because the IRAs will be new account with
fresh deposits.
- quote -

Tom wrote:
- quote -

Sure can. (My wife is retired CSR and I have many clients like you.)

First a definition. Don't confuse the TYPE of investments (cd, mutual
funds, ) with the two IRAs. Each IRA may use different types of
investments as funding mechanisms. For example I started my IRA with
cd's, but rolled them over to mutual fund accounts when I saw the light.

So then, you simply find the right mutual fund for you and roll over
that regular type IRA into it. then open another mutual fund ROTH and
roll over what's in your present ROTH account.

How's that for simplicity?

As for what's in your two IRA's, like Las Vegas, what happens in the
account(s) stays in the accounts, iow, you don't report anything with
you annual tax returns unless and until you start withdrawls.

Now then, when you do accomplish these rollovers, make sure it will be
from trustee to trustee and there will be no 1099R form to worry about.

ChEAr$,
Harlan Lunsford, EA n LA

Hi, I hope I can get some answers to some investment/tax questions.

I'm a Federal employee in my early sixties, Civil Service Retirement
System. Several years ago, I opened an IRA account with after tax dollars
and all money deposited into that account was after tax dollars. (I was told
as a Federal employee w/ CSR I had to set up an IRA using after tax dollars)
A couple of years later the ROTH became available and I opened a ROTH
account. I use Turbo Tax Deluxe to calculate my federal and state income
taxes, unfortunately Turbo Tax was no help instructing me how to report
deposits into the IRA I created w/ after tax dollars so I contacted my
broker and a local investment company but each gave me different
information. After tax season I went to the local IRS office for advice but
the advice was to read a couple of IRS booklets which didn't address my
situation.

I want to convert some of my CDs to mutual fund investments and minimize my
yearly investment tax liability if that's a smart thing to do in my case.( I
may need the money from some of the investments within a few years so I
don't want to add anymore to my ROTH) If I open another after tax IRA how
do I report after tax deposits on my annual tax return?
Why can't I open a pretax IRA (I also have a Federal TSP retirement account)

My original after tax IRA has been dormant for years because I didn't want
to make any deposits because of not knowing how report the deposits to the
IRS. There's not much left in this account because most of it was wiped out
during the dot.com bust.

Hope you can read this one

Tom