In this section, we look at the general
rules that apply to both the traditional IRAs and the
Roth IRA.
You are not allowed to perform all
of these following transactions under both the traditional
and the Roth IRA.
Any payments or contributions you make
towards an IRA must be in cash. You are not permitted to
contribute to an IRA in the form of stock holdings or bonds.
This applies only to IRA contributions and NOT IRA
Rollovers or Conversions.
Your IRA (Individual Retirement Account)
must be held as a trust or custodial account at any of the
following holdings:
- Your local bank
- Credit Union (must be Federally
Insured)
- Mutual fund brokers
- Stock brokers
- Insurance companies
- Loan or savings brokers
Contributions or payments towards an
IRA must be made from the first day of the calendar year
till the day you file your income tax return - there are
no extensions. For example, if you file your income tax
return on April 30th, then you can make IRA contributions
from January 1st to April 30th of the year ONLY (if April
30th is a holiday, then the deadline is the first business
day after April 30th).
Here are a few reminders about IRA
contribution timings and rules:
- If you make an IRA contribution
on April 30th, it is important to say for which year it
is, is it for the previous year or the next taxation year?
- If you treat the contribution as
previous year's contribution, it will be taken as if you
made the contribution before December 31st, of the previous
year.
- You can file your income tax return
before making IRA contributions. Just include these expected
IRA contributions to your income tax return beforehand.
Incase you do NOT end up making the IRA contributions,
submit a modified Income Tax Return to the IRS and cancel
out the IRA contributions.
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