Individual Retirement Accounts (IRAs)
Chapters in this video
- 0:00 Traditional IRA contribution limits and earned income rule
- 0:52 Deductibility phase-outs and Sam the Supervisor's trap
- 2:07 Non-deductible contributions and the pause-and-recall check
- 4:05 Roth IRA: after-tax in, tax-free out, no lifetime required minimum distributions (RMDs)
- 5:00 Roth income limits and the contribution lockout
- 5:31 Qualified distributions: the two-condition rule
- 6:02 The five-year master clock and the forced recall check
- 6:47 Permissible IRA holdings and the prohibited-investment list
- 7:58 The collectible coin exception
- 8:29 Rapid-fire exam recap
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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