Open your Traditional IRA today!
Traditional IRA Account Application (AdobeSign)
IRS Form 5305 Traditional (PDF)
Have Questions? Contact a Certified IRA Specialist at IRASpecialists@QuestTrust.com. Forms and Requests Received Will be Processed in 24-48 hours of Quest Receiving the Form.
The Traditional IRA, often called a Rollover IRA, can be used by anyone who earns or whose filing-jointly spouse earns “taxable compensation,” until age 72. 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 72 and can no longer make contributions. For 2023, the contribution limit for a Traditional IRAs increased to $6,500 and still allows for a $1,000 “catch-up” contribution for those over the age of 50.
Answers to some of the most frequently asked investing questions (FAQs) about Traditional IRAs
Can I buy real estate with a Traditional IRA?
Buying real estate with an IRA or a solo 401k certainly can be done! You just need to find a custodian that will hold non-traditional or ‘alternative’ investments.
Can I use a Traditional IRA to buy a house?
You can use a Traditional IRA to buy a house.
How do I use a Traditional IRA to buy a house?
You first need to find a custodian that will hold non-traditional or ‘alternative’ investments and establish an IRA with them. You will then locate the house you want to purchase, and typically, your custodian will require you to sign some internal forms. After making sure the contract is in the name of the IRA, your custodian will purchase the property for you on behalf of your IRA.
Can a non-working spouse contribute to a Traditional IRA?
Yes. A nonworking spouse can make a contribution to an IRA as long as the couple files a joint tax return, and the working spouse does have earned income that is equal to (or more than) the total amount of the nonworking spouse’s contribution plus the working spouse’s contribution.
How much can a non-working spouse contribute to a Traditional IRA?
A nonworking spouse can contribute up to $6,500 or $7,500 if over the age of 50.
What is the last day to contribute to a Traditional IRA?
The last day to contribute to a Traditional IRA is usually the tax filing deadline.
How do you set up a self-directed Traditional IRA?
You will first need to find the custodian you like! Once you have picked a good custodian, you will complete some paperwork (typically an application) and in a few days, your account will be open.
*Processes will vary by custodian.
Check out this video to see the most common questions about Traditional IRAs answered
- $6,500 for 2023
- $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 AccountServices@QuestTrust.com
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 2023 is $73,000 – $83,000.
For married couples filing jointly, where one spouse’s IRA contribution is covered by a work retirement plan, the phase out range for 2023 is $116,000 – $136,000.
For married couples filing separately, where the individual is covered by a work retirement plan, the phase out range for 2023 is $0-$10,00.
For spousal IRA contributions, the deduction is phased out if the couple’s income in 2023 is $218,000.
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 72. Once you hit 72, Required Minimum Distributions (RMD) begin.
- The required minimum distribution is calculated:
- (Fair Market Value of IRA) ÷ (life expectancy of IRA account holder)