Contact Us For All Your Banking Needs: (870) 460-6400
If an account holder has earned income and is not an active participant of an employer sponsored Qualified Retirement Plan – the $5,000 maximum contribution is totally deductible on their tax return. The benefit of the tax deduction is that it lowers the taxable income for the year, therefore, lowering the income tax liability for the year.
Funds are available to account holders at anytime, but if the account holder is not 59½ or does not meet certain exceptions, they could be assessed the 10% premature distribution penalty by the IRS on the amount withdrawn. The account holder will pay taxes on the amount withdrawn.
The account holder must have earned income and is allowed the maximum nondeductible contribution – $5,000. The earnings on the contribution accumulate tax–free and penalty free as long as the 5 year waiting period has been satisfied and qualifying distribution rules have been met.
Assets held in Roth IRA are not subject to age 70½ required minimum distributions.
Traditional IRAs may be converted or rolled over to a Roth IRA without an IRS premature–distribution penalty, but will be subject to full taxation. The law provides that the amount of the conversion is fully taxable the year of the transaction.
An account established for the benefit of each child under the age of 18 which allows a maximum nondeductible annual contribution of $2,000. The earnings on the contribution accumulate tax–free.
Distributions will be considered tax–free as long as the funds are used for qualifying post–secondary tuition, fees, books, supplies and basic room and board charges.
All three types of IRAs can be Self–Directed IRA. A Self–Directed IRA offers a wide range of investments for funding your IRA. This gives you more flexibility in risk and yield. In all other aspects, Self–Directed IRAs are the same as any other IRAs.
What Investments are available for a Self–Directed IRA? – You may choose from a variety of investments including deposit instruments, stocks, bonds, government securities, mutual funds, and money market funds.
Simplified Employee Pension (SEP) Plan – Any employer, whether a corporation, partnership, or a self–employed individual, may establish a SEP even if there are no other employees. You may contribute up to 25% of compensation or $49,000.00 (2010), whichever is less. A SEP allows self–employed individuals and businesses to fully deduct their eligible SEP contributions.
SIMPLE Plan – SIMPLE is a new salary reduction arrangement available to employers and employees. SIMPLE contributions are deposited into a segregated IRA called SIMPLE IRA.
What are the benefits of a SIMPLE? – Besides providing you and your employees with a more secure retirement, SIMPLE offers generous tax advantages. Employee elective deferrals and employer matching contributions are tax deferred to the participant and tax deductible to the employer. Earnings in the account also grow tax deferred. And, SIMPLE eliminates some of the tedious requirements and procedures connected with other qualified plans.
Your privacy is very important to us. We would like to advise you that Internet email is not secure. Please do not submit any information that you consider confidential. We recommend you do not include your social security or account number or other specific identifying information.
You are leaving Union Bank & Trust's website and linking to a third party site. Please be advised that you will then link to a website hosted by another party, where you will no longer be subject to, or under the protection of, the privacy and security policies of Union Bank & Trust. We recommend that you review and evaluate the privacy and security policies of the site that you are entering. Union Bank & Trust assumes no liability for the content, information, security, policies or transactions provided by these other sites.