Nondeductible IRA Contributions Sample Clauses

Nondeductible IRA Contributions. Even if your income exceeds the limits described above, you may still make a nondeductible IRA contribution up to the lesser of the maximum amount allowed under current law or 100% of your compensation to a Traditional IRA (or, if eligible, to a Xxxx XXX). There are no income limits for making a nondeductible contribution to a Traditional IRA. You are required to designate on your tax return the extent to which your IRA contribution is nondeductible. Therefore, your designation must be made by the due date (including extensions) for filing your tax return for the year for which the contribution is made. If you overstate the amount of nondeductible contributions for a taxable year, a penalty of $100 will be assessed for each overstatement unless you can show that the overstatement was due to a reasonable cause.
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Nondeductible IRA Contributions. You may make a nondeductible IRA contribution in one of two ways. First, you are permitted to treat any regular IRA contributions that are not deductible due to your active participation status as explained above as nondeductible contributions. Secondly, you are permitted to treat an otherwise deductible IRA contribution as a nondeductible contribution. Your total contribution for the year, however, is still limited to the lesser of 100% of your compensation or the applicable annual dollar limitation. Nondeductible IRA contributions represent money in your IRA which has already been taxed. Therefore, when you receive a distribution from any of your traditional IRAs (including SEP IRAs and SIMPLE IRAs), a portion of each distribution will be treated as a tax-free return of your nondeductible contributions. You are responsible for indicating the amount of nondeductible IRA contributions you make for a year on IRS Form 8606 which is attached to your Federal income tax return. You should also be aware that there is a penalty of $100 if you should overstate the nondeductible amount unless you can show it was due to a reasonable cause. There is also a $50 penalty if you do not file the IRS Form 8606 for years that you are required to do so. If you make a nondeductible IRA contribution for a year and you decide not to treat it as a nondeductible contribution, you must withdraw the contribution plus earnings attributable to the nondeductible contribution on or before the tax filing deadline, including extensions, for the year during which the contribution was made. You may not take a deduction for such amounts. Such earnings will be taxable to you in the year in which the contribution was made and may be subject to the 10% additional tax if you are under the age of 59 1/2.
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Nondeductible IRA Contributions. Even if you are not eligible to make a deductible IRA contribution, you may contribute to your IRA on a nondeductible basis, providing you meet the eligibility requirements for making an IRA contribution. The earnings on nondeductible contributions will be tax deferred until distributed just like the earnings on deductible contributions, and deductible and nondeductible contributions may be made to the same IRA account. You are responsible however, for maintaining adequate records of all the nondeductible contributions you make over the years. Your failure to do so could result in double taxation. The trustee or custodian of your IRA is not required to either determine or report to the IRS, the deductibility or nondeductibility of any contributions you make to your IRA. Tax Credit for IRA Contributions: Beginning in 2002, "eligible participants" will be able to claim a nonrefundable tax credit equal to a percentage (not to exceed 50%) of the total of their "Qualified Retirement Savings Contributions." An eligible participant’s qualified retirement savings contribution amounts for any tax year equals the sum of his or her: (1) IRA contributions (including Xxxx XXX contributions); (2) Salary Reduction Contributions under a SIMPLE IRA plan; (3) elective salary deferrals under a 401(k) plan; a 403(b) plan or eligible Code section 457 plan; and (4) voluntary after tax /nondeductible employee contributions made to any of these plans. To be eligible, a participant must be age 18 or older as of the end of the year and must not be a student or other dependent for whom another person such as a parent can claim a tax deduction. The maximum amount of the credit in any tax year will be equal to the "applicable percentage (%)" times the amount of Qualified Retirement Savings Contributions (not to exceed $2,000) made by an eligible participant. The applicable percentage is determined by a participant’s tax filing status and Adjusted Gross Income (AGI) as follows: AGI Joint Return AGI Head of Household AGI All Others Applicable % Applicable Amount 0 - $30,000 0 - $22,500 0 - $15,000 50% $1,000 $30,000 - $32,500 $22,500 - $24,375 $15,000 - $16,250 20% $400 $32,500 - $50,000 $24,375 - $37,500 $16,250 - $25,000 10% $200
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Related to Nondeductible IRA Contributions

  • Elective Deferrals An Employee will be eligible to become a Contributing Participant in the Plan (and thus be eligible to make Elective Deferrals) and receive Matching Contributions (including Qualified Matching Contributions, if applicable) after completing 1 (enter 0, 1 or any fraction less than 1) Years of Eligibility Service.

  • EMPLOYEE CONTRIBUTIONS (a) Each participant shall be allowed to contribute on a bi-weekly basis up to an amount equal to eighty percent (80%) of the Participant’s wage. Such bi-weekly wage deductions shall be in increments of one percent (1%) and shall be contributed to the Participant’s account. The participant may contribute on a pre-tax, after-tax, Xxxx basis or any combination.

  • Employer Contributions 8.1 Rates at which the Employer shall contribute for each hour of work performed on behalf of each employee employed under the terms of this Agreement are contained in the Appendices attached to and forming part of this Agreement.

  • Matching Contributions The Employer will make matching contributions in accordance with the formula(s) elected in Part II of this Adoption Agreement Section 3.01.

  • DEFERRAL CONTRIBUTIONS The Advisory Committee will allocate to each Participant's Deferral Contributions Account the amount of Deferral Contributions the Employer makes to the Trust on behalf of the Participant. The Advisory Committee will make this allocation as of the last day of each Plan Year unless, in Adoption Agreement Section 3.04, the Employer elects more frequent allocation dates for salary reduction contributions.

  • Rollover Contributions Generally, a rollover is a movement of cash or assets from one retirement plan to another. If you are required to take minimum distributions because you are age 70½ or older, you may not roll over any required minimum distributions. Both the distribution and the rollover contribution are reportable when you file your income taxes. You must irrevocably elect to treat such contributions as rollovers. IRA-to-IRA Rollover: You may withdraw, tax free, all or a portion of your Traditional IRA if you contribute the amount withdrawn within 60 days from the date you receive the distribution into the same or another Traditional IRA as a rollover. To complete a rollover of a SIMPLE IRA distribution to your Traditional IRA, at least two years must have elapsed from the date on which you first participated in any SIMPLE IRA plan maintained by the employer, and you must contribute the distribution within 60 days from the date you receive it. Only one IRA distribution within any 12-month period may be rolled over in an IRA-to-IRA rollover transaction. The 12-month waiting period begins on the date you receive an IRA distribution that you subsequently roll over, not on the date you complete the rollover transaction. If you roll over the entire amount of an IRA distribution (including any amount withheld for federal, state, or other income taxes that you did not receive), you do not have to report the distribution as taxable income. Any amount not properly rolled over within the 60-day period will generally be taxable in the year distributed (except for any amount that represents basis) and may be, if you are under age 59½, subject to the premature distribution penalty tax. Employer Retirement Plan-to-Traditional IRA Rollover (by Traditional IRA Owner): Eligible rollover distributions from qualifying employer retirement plans may be rolled over, directly or indirectly, to your Traditional IRA. Qualifying employer retirement plans include qualified plans (e.g., 401(k) plans or profit sharing plans), governmental 457(b) plans, 403(b) arrangements and 403(a) arrangements. Amounts that may not be rolled over to your Traditional IRA include any required minimum distributions, hardship distributions, any part of a series of substantially equal periodic payments, or distributions consisting of Xxxx 401(k) or Xxxx 403(b) assets. To complete a direct rollover from an employer plan to your Traditional IRA, you must generally instruct the plan administrator to send the distribution to your Traditional IRA Custodian. To complete an indirect rollover to your Traditional IRA, you must generally request that the plan administrator make a distribution directly to you. You typically have 60 days from the date you receive an eligible rollover distribution to complete an indirect rollover. Any amount not properly rolled over within the 60-day period will generally be taxable in the year distributed (except for any amount that represents after-tax contributions) and may be, if you are under age 59½, subject to the premature distribution penalty tax. If you choose the indirect rollover method, the plan administrator is typically required to withhold 20% of the eligible rollover distribution amount for purposes of federal income tax withholding. You may, however, make up the withheld amount out of pocket and roll over the full amount. If you do not make up the withheld amount out of pocket, the 20% withheld (and not rolled over) will be treated as a distribution, subject to applicable taxes and penalties. Conduit IRA: You may use your IRA as a conduit to temporarily hold amounts you receive in an eligible rollover distribution from an employer’s retirement plan. Should you combine or add other amounts (e.g., regular contributions) to your conduit IRA, you may lose the ability to subsequently roll these funds into another employer plan to take advantage of special tax rules available for certain qualified plan distribution amounts. Consult your tax advisor for additional information. Employer Retirement Plan-to-Traditional IRA Rollover (by Inherited Traditional IRA Owner): Please refer to the section of this document entitled “Inherited IRA”. Traditional IRA-to-Employer Retirement Plan Rollover: If your employer’s retirement plan accepts rollovers from IRAs, you may complete a direct or indirect rollover of your pre-tax assets in your Traditional IRA into your employer retirement plan. If you are required to take minimum distributions because you are age 70½ or older, you may not roll over any required minimum distributions. Rollover of Exxon Xxxxxx Settlement Income: Certain income received as an Exxon Xxxxxx qualified settlement may be rolled over to a Traditional IRA or another eligible retirement plan. The amount contributed cannot exceed the lesser of $100,000 (reduced by the amount of any qualified settlement income contributed to an eligible retirement plan in prior tax years) or the amount of qualified settlement income received during the tax year. Contributions for the year can be made until the due date for filing your return, not including extensions.

  • Employer Profit Sharing Contributions An Employee will be eligible to become a Participant in the Plan for purposes of receiving an allocation of any Employer Profit Sharing Contribution made pursuant to Section 11 of the Adoption Agreement after completing 1 (enter 0, 1, 2 or any fraction less than 2)

  • Catch-Up Contributions In the case of a Traditional IRA Owner who is age 50 or older by the close of the taxable year, the annual cash contribution limit is increased by $1,000 for any taxable year beginning in 2006 and years thereafter.

  • Qualified Matching Contributions If selected below, the Employer may make Qualified Matching Contributions for each Plan Year (select all those applicable):

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