The Traditional IRA is the most common type of Individual Retirement Arrangement (IRA). Why? Well, it is probably because most people rollover their employer’s pre-tax retirement account into a Traditional IRA. The Traditional IRA offers the advantage of providing a tax deduction for those who qualify. As a result, it is very appealing to those wanting to pay themselves instead of the IRS.
A Traditional IRA is a type of individual retirement account in which you can make pre-tax contributions. The investments in the account grow tax-deferred. Then, you pay income tax on withdrawals at your regular tax rate. Withdrawals taken before reaching the age of 59.5 are subject to an early-withdrawal penalty.
The Rules
Publication 590-A and Publication 590-B explain the details of IRAs including:
- Setting up an IRA
- Contributing to an IRA
- Transferring money or property to and from an IRA
- Handling an inherited IRA
- Receiving distributions (making withdrawals) from an IRA
- Taking a credit for contributions to an IRA
- A comparison of traditional and Roth IRAs
Traditional IRAs (like Roth IRAs) have a contribution limit for 2023 of $6,500 if you are under 50 and $7,500 of your age is 50 or over.
To decide if a Traditional IRA is right for you, ask your competent tax advisor. When you are ready to move forward and open an account contact us at uDirect IRA Services Toll-Free at (866) 447-6598 or by email at info@uDirectIRA.com
To open an account, we need:
1) Application (Click Here)
2) Copy of your driver’s license or passport
3) Check for $50 for the set-up fee (made payable to uDirect IRA Services) or pay on PayPal
4) Copy of the statement from your current IRA or other retirement account.
5) Copy of your social security card OR the first 2 pages of your federal tax return. Please sign and date the tax return page 2.
6) The Inherited IRA and the Solo 401k must be sent in as a written application.
