Traditional. Part One: IRAs Part One of the Disclosure Statement describes the rules applicable to Traditional IRAs. IRAs described in these pages are called “Traditional IRAs” to distinguish them from the “▇▇▇▇ IRAs,” which are described in Part Two of this Disclosure Statement. Contributions to a ▇▇▇▇ ▇▇▇ are not deductible (regardless of your adjusted gross income), but withdrawals that meet certain requirements are not subject to federal income tax, so that dividends and investment growth on amounts held in the ▇▇▇▇ ▇▇▇ can escape federal income tax. Please see Part Two of this Disclosure Statement if you are interested in learning more about ▇▇▇▇ IRAs. Traditional IRAs described in this Disclosure Statement may be used as part of a simplified employee pension (SEP) plan maintained by your employer. Under a SEP your employer may make contributions to your Traditional IRA, and these contributions may exceed the normal limits on Traditional IRA contributions. This Disclosure Statement does not describe IRAs established in connection with a SIMPLE IRA program maintained by your employer. Employers provide special explanatory materials for accounts established as part of a SIMPLE IRA program. Traditional IRAs may be used in connection with a SIMPLE IRA program, but for the first two years of participation a special SIMPLE IRA (not a Traditional IRA) is required. YOUR TRADITIONAL IRA This Part One contains information about your Traditional Individual Retirement Custodial Account with UMB Bank n.a. as Custodian. A Traditional IRA gives you several tax benefits. Earnings on the assets held in your Traditional IRA are not subject to federal income tax until withdrawn by you. You may be able to deduct all or part of your Traditional IRA contribution on your federal income tax return. State income tax treatment of your Traditional IRA may differ from federal treatment; ask your state tax department or your personal tax adviser for details. Be sure to read Part Three of this Disclosure Statement for important additional information, including information on how to revoke your Traditional IRA, investments and prohibited transactions, fees and expenses, and certain tax requirements. ELIGIBILITY What the requirements for Traditional a IRA? eligibility You are eligible to establish and contribute to a Traditional IRA for a year if: • You received compensation (or earned income if you are self-employed) during the year for personal services you rendered. If you received taxable alimony, this is treated like compensation for IRA purposes. • You did not reach age 70½ during the year. Contribute Can I IRA Traditional for my Spouse? For each year before the year when your spouse attains age 70½, you can contribute to a separate Traditional IRA for your spouse, regardless of whether your spouse had any compensation or earned income in that year. This is called a “spousal IRA.” To make a contribution to a Traditional IRA for your spouse, you must file a joint tax return for the year with your spouse. For a spousal IRA, your spouse must set up a different Traditional IRA, separate from yours, to which you contribute. May Revoke My I IRA? You may revoke a newly established Traditional IRA at any time within seven days after the date on which you receive this Disclosure Statement. A Traditional IRA established more than seven days after the date of your receipt of this Disclosure Statement may not be revoked. To revoke your Traditional IRA, mail or deliver a written notice of revocation to the Custodian at the address which appears at the end of this Disclosure Statement. Mailed notice will be deemed given on the date that it is postmarked (or, if sent by certified or registered mail, on the date of certification or registration). If you revoke your Traditional IRA within the seven-day period, you are entitled to a return of the entire amount you originally contributed into your Traditional IRA, without adjustment for such items as sales charges, administrative expenses or fluctuations in market value. CONTRIBUTIONS When Make Can I Contributions Traditional IRA? You may make a contribution to your existing Traditional IRA or establish a new Traditional IRA for a taxable year by the due date (not including any extensions) for your federal income tax return for the year. Usually this is April 15 of the following year. Much Can I to IRA? Contribute my
Appears in 1 contract
Sources: Ira Adoption Agreement
Traditional. Part One: IRAs Part One of the Disclosure Statement describes the rules applicable to Traditional IRAs. IRAs described in these pages are called “Traditional IRAs” to distinguish them from the “▇▇▇▇ IRAs,” which are described in Part Two of this Disclosure Statement. Contributions to a ▇▇▇▇ ▇▇▇ are not deductible (regardless of your adjusted gross income), but withdrawals that meet certain requirements are not subject to federal income tax, so that dividends and investment growth on amounts held in the ▇▇▇▇ ▇▇▇ can escape federal income tax. Please see Part Two of this Disclosure Statement if you are interested in learning more about ▇▇▇▇ IRAs. Traditional IRAs described in this Disclosure Statement may be used as part of a simplified employee pension (SEP) plan maintained by your employer. Under a SEP your employer may make contributions to your Traditional IRA, and these contributions may exceed the normal limits on Traditional IRA contributions. This Disclosure Statement does not describe IRAs established in connection with a SIMPLE IRA program maintained by your employer. Employers provide special explanatory materials for accounts established as part of a SIMPLE IRA program. Traditional IRAs may be used in connection with a SIMPLE IRA program, but for the first two years of participation a special SIMPLE IRA (not a Traditional IRA) is required. YOUR TRADITIONAL IRA This Part One contains information about your Traditional Individual Retirement Custodial Account with UMB Bank n.a. as Custodian. A Traditional IRA gives you several tax benefits. Earnings on the assets held in your Traditional IRA are not subject to federal income tax until withdrawn by you. You may be able to deduct all or part of your Traditional IRA contribution on your federal income tax return. State income tax treatment of your Traditional IRA may differ from federal treatment; ask your state tax department or your personal tax adviser for details. Be sure to read Part Three of this Disclosure Statement for important additional information, including information on how to revoke your Traditional IRA, investments and prohibited transactions, fees and expenses, and certain tax requirements. ELIGIBILITY What the requirements for Traditional a IRA? eligibility You are eligible to establish and contribute to a Traditional IRA for a year if: • You received compensation (or earned income if you are self-employed) during the year for personal services you rendered. If you received taxable alimony, this is treated like compensation for IRA purposes. • You did not reach age 70½ during the year. Contribute Can I IRA Traditional for my Spouse? For each year before the year when your spouse attains age 70½, you can contribute to a separate Traditional IRA for your spouse, regardless of whether your spouse had any compensation or earned income in that year. This is called a “spousal IRA.” To make a contribution to a Traditional IRA for your spouse, you must file a joint tax return for the year with your spouse. For a spousal IRA, your spouse must set up a different Traditional IRA, separate from yours, to which you contribute. May Revoke My I IRA? You may revoke a newly established Traditional IRA at any time within seven days after the date on which you receive this Disclosure Statement. A Traditional IRA established more than seven days after the date of your receipt of this Disclosure Statement may not be revoked. To revoke your Traditional IRA, mail or deliver a written notice of revocation to the Custodian at the address which appears at the end of this Disclosure Statement. Mailed notice will be deemed given on the date that it is postmarked (or, if sent by certified or registered mail, on the date of certification or registration). If you revoke your Traditional IRA within the seven-day period, you are entitled to a return of the entire amount you originally contributed into your Traditional IRA, without adjustment for such items as sales charges, administrative expenses or fluctuations in market value. CONTRIBUTIONS When Make Can I Contributions Traditional IRA? You may make a contribution to your existing rollover from one Traditional IRA or establish a new to another Traditional IRA you already have or to one you establish to receive the rollover. Such a rollover must be completed within 60 days after the withdrawal from your first Traditional IRA. In limited circumstances, when an IRA rollover could not be completed within 60 days due to circumstances beyond your control or not your fault, you can apply to the IRS for approval of a rollover after 60 days. However, IRS approval may not be needed if the financial institution receiving the rollover did not deposit the rollover amount in an IRA. Consult your tax adviser for more information. Similar exceptions to the 60-day requirement for a taxable valid rollover apply to plan-to-IRA and IRA-to-plan rollovers (see above). After making a rollover from one Traditional IRA, you must wait a full year by (365 days) before you can make another such rollover from the due date (same Traditional IRA. In addition, after Traditional IRA assets are rolled over from one IRA to another, a second rollover of the same assets cannot including any extensions) be made for your federal income tax return for the a full year. Usually this is April 15 (However, you can instruct a Traditional IRA custodian to transfer amounts directly to another Traditional IRA custodian; such a direct transfer does not count as a rollover.) Beginning on January 1, 2015, you can make only one rollover from a Traditional IRA to another (or the same) Traditional IRA in any 12-month period, regardless of the following yearnumber of Traditional IRAs you own. Much Can I A transition rule applies to rollovers in 2015, and rollovers made in 2014 will not prevent a 2015 rollover provided the 2015 distribution is from a different IRA that neither made nor received the 2014 rollover. May Rollover Transfer include After- Tax Nondeductible Contributions? a or or Yes. After-tax contributions may be rolled over from a qualified employer plan or a 403(b) arrangement to a Traditional IRA. These rollovers or transfers, as well as rollovers or transfers of nondeductible contributions from another Traditional IRA, may include after-tax or nondeductible contributions. Die, can Over Account to an IRA? Contribute mymy Beneficiary Roll my Employer
Appears in 1 contract
Sources: Ira Adoption Agreement
Traditional. The maximum contribution you can make to a Traditional IRA generally is the IRA Contribution Limit (or the IRA Contribution Limit plus a “catch-up” contribution if you are 50 or over) or 100% of compensation or earned income, whichever is less. Any amount contributed to the IRA above the maximum is considered an “excess contribution.” The excess is calculated using your contribution limit, not the deductible limit. An excess contribution is subject to excise tax of 6% for each year it remains in the IRA. Contribution? How can I Correct an Excess Excess contributions may be corrected, without paying a 6% penalty, by withdrawing the excess and any earnings on the excess before the due date (including extensions) for filing your federal income tax return for the year for which you made the excess contribution. The IRS automatically grants to taxpayers who file their taxes by the April 15th deadline a six-month extension of time (until October 15) to remove an excess contribution for the tax year covered by that filing. A deduction should not be taken for any excess contribution. Earnings that are a gain must be included in your income for the tax year for which the contribution was made and may be subject to a 10% premature withdrawal tax if you have not reached age 59½. (Refer to IRS Publication 590 regarding reporting of gains or losses on withdrawn excess contributions). Note, any excess contribution withdrawn after the tax return due date (including any extensions) for the year for which the contribution was made will be subject to the 6% excise tax, except under limited circumstances. The IRS automatically grants to taxpayers who file their taxes by the April 15th deadline a six-month extension of time (until October 15) to re-characterize a contribution or remove an excess contribution for the tax year covered by that filing. Any such excess contributions must be reported to the IRS (See ‘What Tax Information Must I Report to the IRS?’ in Part One: IRAs Part One Three of this Disclosure Statement). Please consult with your tax advisor on specific questions regarding correction of excess contributions. Contributions Treated of the Disclosure Statement describes Preceding Rules Apply? How are Excess if None Unless an excess contribution qualifies for the rules applicable special treatment outlined above, the excess contribution and any earnings on it withdrawn after tax filing time will be includible in taxable income and may be subject to a 10% premature withdrawal penalty. No deduction will be allowed for the excess contribution for the year in which it is made. Excess contributions may be corrected in a subsequent year to the extent that you contribute less than your maximum contribution amount. As the prior excess contribution is reduced or eliminated, the 6% excise tax will become correspondingly reduced or eliminated for subsequent tax years. Also, you may be able to take an income tax deduction for the amount of excess that was reduced or eliminated, depending on whether you would be able to take a deduction if you had instead contributed the same amount. CONVERSION OF TRADITIONAL IRA existing Can I convert an IRA a IRA? Traditional IRAs. IRAs described in these pages are called “Traditional IRAs” to distinguish them from the “into ▇▇▇▇ IRAs,” which are Yes, you can convert an existing Traditional IRA into a ▇▇▇▇ ▇▇▇ if you meet the eligibility requirements described below. Conversion may be accomplished in Part Two any of this Disclosure Statement. Contributions three ways: First, you can withdraw the amount you want to convert from your Traditional IRA and roll it over to a ▇▇▇▇ ▇▇▇ are not deductible (regardless of your adjusted gross income)within 60 days. Second, but withdrawals that meet certain requirements are not subject to federal income tax, so that dividends and investment growth on amounts held in the you can establish a ▇▇▇▇ ▇▇▇ can escape federal income tax. Please see Part Two and then direct the custodian of this Disclosure Statement if your Traditional IRA to transfer the amount in your Traditional IRA you are interested in learning more about wish to convert to the new ▇▇▇▇ IRAs▇▇▇. Traditional IRAs described in this Disclosure Statement may be used as part of a simplified employee pension (SEP) plan maintained by your employer. Under a SEP your employer may make contributions Third, if you want to your Traditional IRA, and these contributions may exceed the normal limits on convert an existing Traditional IRA contributions. This Disclosure Statement does not describe IRAs established in connection with a SIMPLE IRA program maintained by your employer. Employers provide special explanatory materials for accounts established as part of a SIMPLE IRA program. Traditional IRAs may be used in connection with a SIMPLE IRA program, but for the first two years of participation a special SIMPLE IRA (not a Traditional IRA) is required. YOUR TRADITIONAL IRA This Part One contains information about your Traditional Individual Retirement Custodial Account with UMB Bank n.a. as Custodiancustodian to a ▇▇▇▇ ▇▇▇, you may give us directions to convert; we will convert your existing account when the paperwork to establish your new ▇▇▇▇ ▇▇▇ is complete. A From and after 2010, the opportunity to convert a regular IRA to a ▇▇▇▇ ▇▇▇ is generally available to all taxpayers regardless of income. Married taxpayers are eligible to convert a Traditional IRA gives you several to a ▇▇▇▇ ▇▇▇ only if they filed a joint income tax benefits. Earnings on the assets held in your Traditional IRA return; married taxpayers filing separately are not subject eligible to federal convert. However, taxpayers that file separately and have lived apart for the entire taxable year are considered not married, so conversion is permitted. For conversions occurring in 2010, unless a taxpayer elects otherwise, the amount includable in gross income as a result of the conversion will be included ratably in the taxpayer’s income in 2011 and 2012. Income inclusion will be accelerated, if converted amounts are distributed before 2012. Special rules apply under which you may undo (or “recharacterize”) a conversion. These rules are complex; be sure to consult a competent tax until withdrawn by youprofessional for assistance. You may be able Distribution Receive from my Employer’s Retirement Plan into TRANSFERS/ ROLLOVERS Roll Can I Transfer or Traditional Over a I a Most distributions from employer plans or 403(b) arrangements (for employees of tax-exempt employers) or eligible 457 plans (for employees of certain governmental employers) are eligible for rollover to deduct a Traditional IRA. The main exceptions are • payments over the lifetime or life expectancy of the participant (or participant and a designated beneficiary), • installment payments for a period of 10 years or more, • required distributions (generally the rules require distributions starting at age 70½ or for certain employees starting at retirement, if later), and • hardship withdrawals from a 401(k) plan or a 403(b) arrangement. If you are eligible to receive a distribution from a tax qualified retirement plan as a result of, for example, termination of employment, plan discontinuance, or retirement, all or part of the distribution may be transferred directly into your Traditional IRA. This is a called a “direct rollover.” Or, you may receive the distribution and make a rollover to your Traditional IRA contribution within 60 days. By making a direct rollover or a regular rollover, you can defer income taxes on the amount rolled over until you subsequently make withdrawals from your Traditional IRA. If you are over age 70½ and are required to take minimum distributions under the tax laws, you may not roll over any amount required to be distributed to you under the minimum distribution rules. You also may not roll over a hardship distribution from a 401(k) or 403 (b) plan. Also, if you are receiving periodic payments over your or you and your designated beneficiary’s life expectancy or for a period of at least 10 years, you may not roll over these payments. A rollover to a Traditional IRA must be completed within 60 days after the distribution from the employer retirement plan to be valid. NOTE: A qualified plan administrator or 403(b) sponsor MUST WITHHOLD 20% OF YOUR DISTRIBUTION for federal income tax returntaxes UNLESS you elect a direct rollover. State income tax treatment of Your plan or 403(b) sponsor is required to provide you with information about direct and regular rollovers and withholding taxes before you receive your distribution and must comply with your directions to make a direct rollover. Distribution into Traditional IRA may differ from federal treatment; ask your state tax department or your personal tax adviser for detailsIRA, Subsequently Roll The rules governing rollovers are complicated. Be sure to read Part Three of this Disclosure Statement for important additional information, including information on how to revoke consult your Traditional IRA, investments and prohibited transactions, fees and expenses, and certain tax requirements. ELIGIBILITY What adviser or the requirements for Traditional a IRA? eligibility You are eligible to establish and contribute to a Traditional IRA for a year if: • You received compensation (or earned income IRS if you are self-employed) during the year for personal services you rendered. If you received taxable alimony, this is treated like compensation for IRA purposes. • You did not reach age 70½ during the year. Contribute Can I IRA Traditional for my Spouse? For each year before the year when your spouse attains age 70½, you can contribute to have a separate Traditional IRA for your spouse, regardless of whether your spouse had any compensation or earned income in that year. This is called a “spousal IRAquestion about rollovers.” To make a contribution to a Traditional IRA for your spouse, you must file a joint tax return for the year with your spouse. For a spousal IRA, your spouse must set up a different Traditional IRA, separate from yours, to which you contribute. May Revoke My I IRA? You may revoke a newly established Traditional IRA at any time within seven days after the date on which you receive this Disclosure Statement. A Traditional IRA established more than seven days after the date of your receipt of this Disclosure Statement may not be revoked. To revoke your Traditional IRA, mail or deliver a written notice of revocation to the Custodian at the address which appears at the end of this Disclosure Statement. Mailed notice will be deemed given on the date that it is postmarked (or, if sent by certified or registered mail, on the date of certification or registration). If you revoke your Traditional IRA within the seven-day period, you are entitled to a return of the entire amount you originally contributed into your Traditional IRA, without adjustment for such items as sales charges, administrative expenses or fluctuations in market value. CONTRIBUTIONS When Make Can I Contributions Traditional IRA? You may make a contribution to your existing Traditional IRA or establish a new Traditional IRA for a taxable year by the due date (not including any extensions) for your federal income tax return for the year. Usually this is April 15 of the following year. Much Can I to IRA? Contribute my
Appears in 1 contract
Sources: Ira Adoption Agreement