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roth ira contributions

Combining IRAs with Other Retirement Plans

Do you know the rules for combining various retirement plans with one another? It’s important to know these so you don’t do it wrong.

Ordering Rules for Roth IRA Distributions

Tax (Photo credit: 401K) Did you know that there is a specific order for distributions from your Roth IRA? The Internal Revenue Service has set up a group of rules to determine the order of money, by source, as it is distributed from your account.  This holds for any distribution from a Roth account. Ordering rules First, over-contributions or return of your annual contribution for the tax year.  This means that if you’ve made a contribution to the Roth IRA in the tax year, the first money that you withdraw from the account will be the money that you contributed that year.  If you over-contributed to your account a prior year. Growth on this over-contribution or annual contribution needs to be removed at this time as well, with tax and penalty paid as required. Second, regular annual contributions to the account.  The next money that comes out is the total […]