FINANCIAL CORNER -- IRA SEASON

As IRA season is upon us again, I thought the following information might be of interest to some of the readers:

IRA & Roth IRA: Individuals who are eligible may contribute up to $5,000 to IRAs for taxation year 2011. The $5,000 remains unchanged for year 2012. Additionally, individuals aged 50 and older may make an additional catch-up contribution of $1,000 for 2011 and 2012.

ROTH Conversion: The Roth conversion rules, taking effect in 2010, do away with the restrictions that prevent many people from converting a traditional IRA to a Roth IRA. The rules and process of Roth conversion can get rather complicated, especially if you have both deductible and non-deductible traditional IRAs. Please consult with your tax advisor to see if a Roth conversion is right for you.

SEP IRA: For 2011, employers may be able to contribute up to the lesser of $49,000 or 25% of compensation to SEP IRAs. The $49,000 increases to $50,000 for year 2012.

If you are making plans for 2012, here is some additional information for those who are eligible to keep in mind:

SIMPLE IRA: Plan participants may elect to defer as much as $11,500 in 2012. Participants aged 50 and older may defer an additional $2,500 in 2012 for a total of $14,000.

401(k): Plan participants may defer up to $17,000 in 2012. Participants aged 50 and older may make an additional catch-up deferral of $5,500 in 2012 for a total of $22,500.

By Lily M. Hazelton, CLU, ChFC, CFPR
吳美華 - February 3, 2012

The information contained herein is not intended as a substitute for direct financial or legal advice. Securities America, Inc. does not provide tax advice. Please contact a tax or financial professional for further information.

Lily Hazelton, Registered Representative – CA Insurance License #0B13629
Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC
Advisory services offered through Securities America Advisors, Inc., an SEC Registered Investment Advisory Firm