Nondeductible IRA Contributions Sample Clauses

Nondeductible IRA Contributions. Even if your income exceeds the limits described above, you may still make a nondeductible IRA contribution up to the lesser of the maximum amount allowed under current law or 100% of your compensation to a Traditional IRA (or, if eligible, to a Xxxx XXX). There are no income limits for making a nondeductible contribution to a Traditional IRA. You are required to designate on your tax return the extent to which your IRA contribution is nondeductible. Therefore, your designation must be made by the due date (including extensions) for filing your tax return for the year for which the contribution is made. If you overstate the amount of nondeductible contributions for a taxable year, a penalty of $100 will be assessed for each overstatement unless you can show that the overstatement was due to a reasonable cause.
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Nondeductible IRA Contributions. You may make a nondeductible IRA contribution in one of two ways. First, you are permitted to treat any regular IRA contributions that are not deductible due to your active participation status as explained above as nondeductible contributions. Secondly, you are permitted to treat an otherwise deductible IRA contribution as a nondeductible contribution. Your total contribution for the year, however, is still limited to the lesser of 100% of your compensation or the applicable annual dollar limitation. Nondeductible IRA contributions represent money in your IRA which has already been taxed. Therefore, when you receive a distribution from any of your traditional IRAs (including SEP IRAs and SIMPLE IRAs), a portion of each distribution will be treated as a tax-free return of your nondeductible contributions. You are responsible for indicating the amount of nondeductible IRA contributions you make for a year on IRS Form 8606 which is attached to your Federal income tax return. You should also be aware that there is a penalty of $100 if you should overstate the nondeductible amount unless you can show it was due to a reasonable cause. There is also a $50 penalty if you do not file the IRS Form 8606 for years that you are required to do so. If you make a nondeductible IRA contribution for a year and you decide not to treat it as a nondeductible contribution, you must withdraw the contribution plus earnings attributable to the nondeductible contribution on or before the tax filing deadline, including extensions, for the year during which the contribution was made. You may not take a deduction for such amounts. Such earnings will be taxable to you in the year in which the contribution was made and may be subject to the 10% additional tax if you are under the age of 59 1/2.
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Nondeductible IRA Contributions. Even if you are not eligible to make a deductible IRA contribution, you may contribute to your IRA on a nondeductible basis, providing you meet the eligibility requirements for making an IRA contribution. The earnings on nondeductible contributions will be tax deferred until distributed just like the earnings on deductible contributions, and deductible and nondeductible contributions may be made to the same IRA account. You are responsible however, for maintaining adequate records of all the nondeductible contributions you make over the years. Your failure to do so could result in double taxation. The trustee or custodian of your IRA is not required to either determine or report to the IRS, the deductibility or nondeductibility of any contributions you make to your IRA. Tax Credit for IRA Contributions: Beginning in 2002, "eligible participants" will be able to claim a nonrefundable tax credit equal to a percentage (not to exceed 50%) of the total of their "Qualified Retirement Savings Contributions." An eligible participant’s qualified retirement savings contribution amounts for any tax year equals the sum of his or her: (1) IRA contributions (including Xxxx XXX contributions); (2) Salary Reduction Contributions under a SIMPLE IRA plan; (3) elective salary deferrals under a 401(k) plan; a 403(b) plan or eligible Code section 457 plan; and (4) voluntary after tax /nondeductible employee contributions made to any of these plans. To be eligible, a participant must be age 18 or older as of the end of the year and must not be a student or other dependent for whom another person such as a parent can claim a tax deduction. The maximum amount of the credit in any tax year will be equal to the "applicable percentage (%)" times the amount of Qualified Retirement Savings Contributions (not to exceed $2,000) made by an eligible participant. The applicable percentage is determined by a participant’s tax filing status and Adjusted Gross Income (AGI) as follows: AGI Joint Return AGI Head of Household AGI All Others Applicable % Applicable Amount 0 - $30,000 0 - $22,500 0 - $15,000 50% $1,000 $30,000 - $32,500 $22,500 - $24,375 $15,000 - $16,250 20% $400 $32,500 - $50,000 $24,375 - $37,500 $16,250 - $25,000 10% $200
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Related to Nondeductible IRA Contributions

  • Elective Deferrals An Employee will be eligible to become a Contributing Participant in the Plan (and thus be eligible to make Elective Deferrals) and receive Matching Contributions (including Qualified Matching Contributions, if applicable) after completing 1 (enter 0, 1 or any fraction less than 1) Years of Eligibility Service.

  • Employee Contributions Any member of the bargaining unit who is hired on or after September 1, 2010 is eligible to make a voluntary contribution to the City=s Deferred Compensation Plan offered by Ameritas.

  • Excess Contributions An excess contribution is any amount that is contributed to your IRA that exceeds the amount that you are eligible to contribute. If the excess is not corrected timely, an additional penalty tax of six percent will be imposed upon the excess amount. The procedure for correcting an excess is determined by the timeliness of the correction as identified below.

  • Employer Contributions 8.1 Rates at which the Employer shall contribute for each hour of work performed on behalf of each employee employed under the terms of this Agreement are contained in the Appendices attached to and forming part of this Agreement.

  • Matching Contributions The Employer will make matching contributions in accordance with the formula(s) elected in Part II of this Adoption Agreement Section 3.01.

  • Pension Contributions 19.2.3.1 Unless required by law to commence receiving a pension prior to the Member’s actual retirement date (i.e., currently December 31 of the year in which the Member attains age sixty-nine (69)) the Member who postponed retirement beyond his or her TRD will continue to make pension contributions.

  • Rollover Contributions A rollover is a tax-free distribution of cash or other assets from one retirement program to another. There are two kinds of rollover contributions to an IRA. Xx one, you contribute amounts distributed to you from one IRA xx another IRA. Xxth the other, you contribute amounts distributed to you from your employer's qualified plan or 403(b) plan to an IRA. X rollover is an allowable IRA xxxtribution which is not subject to the limits on regular contributions discussed in Part D above. However, you may not deduct a rollover contribution to your IRA xx your tax return. If you receive a distribution from the qualified plan of your employer or former employer, the distribution must be an "eligible rollover distribution" in order for you to be able to roll all or part of the distribution over to your IRA. Xxe portion you contribute to your IRA xxxl not be taxable to you until you withdraw it from the IRA. Xxur employer or former employer will give you the opportunity to roll over the distribution directly from the plan to the IRA. Xx you elect, instead, to receive the distribution, you must deposit it into the IRA xxxhin 60 days after you receive it. An "eligible rollover distribution" is any distribution from a qualified plan that would be taxable other than (1) a distribution that is one of a series of periodic payments for an employee's life or over a period of 10 years or more, (2) a required distribution after you attain age 70 1/2 and (3) certain corrective distributions. If the entire amount in your IRA xxx been contributed in a tax-free rollover from your employer's or former employer's qualified plan or 403(b) plan, you may later roll over the IRA xx a new employer's plan if such plan permits rollovers. Your IRA xxxld then serve as a conduit for those assets. However, you may later roll those IRA xxxds into a new employer's plan only if you make no further contributions to that IRA, xx commingle the IRA xxxlover funds with existing IRA xxxets.

  • Employer Contribution (a) An Employer contribution for health and dental benefits will only be made for each active employee who has at least eighty (80) paid regular hours in a month and who is eligible for medical insurance coverage, unless otherwise required by law.

  • Catch-Up Contributions In the case of a Traditional IRA Owner who is age 50 or older by the close of the taxable year, the annual cash contribution limit is increased by $1,000 for any taxable year beginning in 2006 and years thereafter.

  • Contributions Without creating any rights in favor of any third party, the Member may, from time to time, make contributions of cash or property to the capital of the Company, but shall have no obligation to do so.

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