[REG] Retirement plans

Deductions for contribution to certain retirement plans 1040, sch1 line 16

Retirement accounts

	Taxpayer	Year of contribution	Distribution
			Principal	Earnings
Pension	Employee	Non-taxable	Taxable	Taxable
SEP	Self-employed	Above deduction	Taxable	Taxable
IRA	Employee & Self-employed	Above deduction	Taxable	Taxable

 

1. SE 자신을 위한 퇴직연금

Self-employed Pension(SEP, Keogh)

IRA>>>line20?

종류: solo 401Ks

 

2. ER이 EE를 위해 불입하는 퇴직연금

Saving incentive match plans for EEs(SIMPLE)

 

Pension

 

 

 

3. SE retirement plan

fully taxable as ordinary income, early late distribution penalties as other retirement plans

 

1. Self-employed Pension (SEP, Keogh) (1040, Sche 1, Line16)

- Maximum contribution and deduction, lessor of $66K or (Self-employed income-SE tax) 20%

- contributions made including extension can still be deductible for the year

 

2. Qualified Pension(retirement plan) and profit sharing plan

- The qualified retirement plan is an employer-sponsored plan that meets IRS US labor department requirements

- ER deductible / EEs are taxed when withdrawing from the pension plan at retirement(contribution + earnings)

- Traditional pensions(DB), 401(k)(DC), profit-sharing plans

- Return of capital portion(EE contributed) are not taxable

Employees cost(EE contribution) / Expected total pension payments x payments received

- If EE dies before recovery of EE's cost, deduct in miscellaneous deduction on Sch A in the final tax return

- rolling distribution within 60 days into other Qualified plan or IRA > defer tax

 

 

3. 401K

- Maximum contribution and deduction, lessor of $66K or (Self-employed income-SE tax) 20%

 

 

 

4. Individual Retirement Arrangement(IRA) (1040, Sche 1,Line20)

	Traditional IRA	Nondeductible Traditional IRA	Roth IRA
Contribution	6.5K annual contribution, +1K for age 50 and older / earned income
Deductibility	$ 6K	Non-deductible	Non-deductible
Distribution	Principal: taxable Earnigs: Taxable	Principal: Non-taxable Earnigs: Taxable	Non-taxable (if qualified distribution, not taxable)
Phase-out for MFJ NP spouses	105K - 125K 198K - 208K   66K - 76K	190K - 220K   95K - 110K

 

Traditional IRA

- Earnings on traditional IRA, taxable in the year of receipt as ordinary income

- taxpayer can avoid current taxation by rolling the distribution into another IRA

- Early withdrawal, before 59 1/2 > 10% penalty

  Exception 1) Qualified higher education expenses 2) Firstime homebuyer, $10K cap

                   3) Medical exp 4) Childbirth or adoption

- minimum distributions required, April 1 of age 73

 

- Limitation

   The amount of contribution & deduction limited to 

Participation in ER-sponsored Retirement plans	Deduction for spouse, not active
MFJ            $116K-136K Not MFJ     $73K-83K	MFJ            $218K-228K(couple's AGI) MFS           $0K-10K(each spouse)

 

- Contribution due

 

 

Roth IRA

- contribution not deductible, distribution not taxable(qualified)

- Allowable contribution

Filling status	Unmarried	MFJ	MFS
Phase out	$138K - $153K	$218K - $228K	$0K - $10K