Don’t attempt to go around the prohibited transaction rules by using cross loans with your IRA. It won’t turn out well.
IRA
Running Afoul of the One-Rollover-Per-Year Rule (and How to Fix It)
In case you’re not aware of it, there is a strict rule that the IRS applies with regard to IRA rollovers: you are allowed to roll funds over from an IRA using the 60-day rule only once during each 12-month period. FYI: Trustee-to-trustee transfers are not considered rollovers for this rule. Here’s an example of what could happen: Early in the year, you withdraw some money from your IRA to help you catch up on some bills. Then, you receive a bonus within the 60-day period after your withdrawal, so you deposit those funds back into the same (or any other) IRA. Later in the year, you want to take another short-term distribution from your IRA, and once again circumstances present the opportunity to put the funds back into the first IRA… but now you’re stuck. You can’t roll the distribution back into the original IRA (or any IRA), since […]
Health Savings Accounts – The Basics, Part 2
. In Part 1 of this two-part article, we introduced the concept of the Health Savings Account. In this portion, we’ll talk about some more of the specifics with regard to implementation of the plan, including contribution limits, setting up the plan, and taking distributions. Contribution Limits on the HSA The amount that you can contribute to a HSA annually depends upon the type of HDHP coverage that you have, as well as your age. For 2021, if you only have coverage for yourself, you can contribute up to $3,600. If you have the family coverage, you can contribute up to $7,200. You are considered to be eligible for the maximum contribution if you were eligible to make a contribution to your HSA on the first day of the last month of the calendar year, regardless of whether you were eligible in prior months (this is known as the […]