Individual Retirement Accounts (IRAs)

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What this video covers

  • Why anyone with earned income can contribute to a Traditional individual retirement account (IRA), and why high income only affects deductibility not the contribution itself
  • How modified adjusted gross income (MAGI) phase-out ranges change based on filing status and employer plan participation, including the brutal married-filing-separately window
  • Why a non-deductible Traditional IRA contribution requires basis tracking on Form 8606 to avoid double taxation on withdrawal
  • How the Roth IRA contribution limits share the same dollar caps as Traditional IRAs but add hard income cutoffs that lock out high earners entirely
  • What qualified distribution means for a Roth IRA: satisfying both the master five-year clock and one triggering event (age 59-1/2, death, disability, or first-time home purchase up to $10,000)
  • Why the five-year clock starts January 1 of the first tax year any Roth contribution was made, and does not restart for subsequent deposits
  • Which investments are prohibited inside any IRA (life insurance, collectibles, S-corporation stock) and the specific exception for certain U.S. minted precious metal coins meeting purity standards

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