Forms and Requests Received Will be Processed in 24-48 hours of Quest Receiving the Form.
The Traditional IRA can be used by anyone who earns or whose filing-jointly spouse earns “taxable compensation,” until age 70 ½. The Traditional IRA is widely known for its tax advantages, as the account owner does not pay taxes upfront, and the contributions can be tax deductible. There are no income limits on who is eligible to enroll in a Traditional IRA, but not everyone can potentially receive a tax deduction. All growth within the account is tax deferred but you must pay taxes upon distribution. You can take distributions at any time, however, a 10% penalty is applied if you take a distribution before you are 59 1/2. Age 59 1/2, distributions are penalty free but taxed as current income. You also must begin taking RMDs, or required minimum distributions, at age 70 1/2 and can no longer make contributions. In 2017 & 2018, the contribution limit for the Traditional IRA is $5,500 and also allows for a $1,000 “catch-up” for those over the age of 50.
2018 & 2019 Contributions:
- $5,500 | $6,000
- $1,000 catch-up (Age 50+)
REMEMBER: You must qualify to contribute to a Traditional IRA. Annual contribution limits apply to the combined Traditional and Roth IRAs of an individual.
What are the benefits of a Traditional IRA?
- Tax Deductible Contributions
- No Income Limits on Participation
- Bankruptcy Protection
- Inheritance – you can pass assets onto beneficiaries after death.
It’s easy to invest with a Self-Directed Traditional IRA!
- Open a Traditional IRA account at Quest
- Fund your account by rolling over an old 401K, transferring money from another IRA, or making a contribution
- Invest in what you know best!
Submit Your Forms: All forms can be mailed or faxed to any of our locations or emailed to NewAccounts@QuestTrust.com
Tax Filing Status 2018 Tax Year 2019 Tax Year Single or Head of Household $63,000 – $73,000 $64,000 – $74,000 Married Filing Jointly $101,000 – $121,000 $103,000 – $123,000 Married Filing Seperately $0 – $10,000 $0 – $10,000
Claiming a Tax Deduction for your IRA Contribution
Your Traditional IRA contributions may be tax-deductible.
The amount of deduction is dependent on your gross income (MAGI) and if you or your spouse is covered by a retirement plan at work.
For single tax filers, the phase out range for 2018 is $63,000-$73,000.
For married couples filing jointly, where one spouse’s IRA contribution is covered by a work retirement plan, the phase out range for 2018 is $101,000-$121,000.
For married couples filing separately, where the individual is covered by a work retirement plan, the phase out range for 2018 is $0-$10,000.
For spousal IRA contributions, the deduction is phased out if the couple’s income in 2018 is $189,000-$199,000.
2018 Traditional IRA Distribution Rules
- A Traditional IRA Distribution is taxed as income for the tax year of the distribution.
- If you withdraw a distribution before the required age of 59.5, you are subject to a 10% early withdrawal penalty.
- Distributions are optional between the ages of 59.5 and 70.5. Once you hit 70.5, Required Minimum Distributions (RMD) begin.
- The required minimum distribution is calculated:
(Fair Market Value of IRA) ÷ (life expectancy of IRA account holder)