Also, any idea how I figure my IRA basis? Is that the amount contributed to a tradtional IRA for previous years?
2007-02-05 05:52:09 · 5 answers · asked by olgadabest 2 in Business & Finance ➔ Taxes ➔ United States
No, you won't report any earnings on your traditional IRA until you make a withdrawal.
You will only have a basis in your traditional IRA if you have ever made contributions to the IRA which you did not deduct on your tax return. If you did this, you should have filed a Form 8606 with your tax return for the year in which you made the nondeductible contribution, and your most recent Form 8606 should show your basis.
To simplify, your basis will be the total of all contributions you made to your traditional IRA which you did not deduct on your tax return.
2007-02-05 06:15:07 · answer #1 · answered by figment_usa 5 · 1⤊ 1⤋
All IRAs grow tax-deferred. In Traditional IRAs, any withdrawals you make from the interest and gains must be reported. In Roth IRAs, any withdrawals after age 59 1/2 is tax-free.
2007-02-05 15:20:32 · answer #2 · answered by Anonymous · 2⤊ 1⤋
You don't need to do anything until you withdraw your funds from the IRA. Any income accumulates without tax until you withdraw. When you withdraw funds from an IRA, the entire amount is taxed as ordinary income.
Not that you'd ever need it, but your basis on an IRA is simply the sum of all of your deposits plus any fees charged over its lifetime.
2007-02-05 05:58:19 · answer #3 · answered by Bostonian In MO 7 · 1⤊ 1⤋
No you don't. Both traditional and ROTH IRAs grow tax free.
2007-02-05 05:56:28 · answer #4 · answered by Anonymous · 0⤊ 0⤋
When you start getting your annuity on your IRA you pay tax on them. On ROTHIRA you don't pay any tax on your annuities when it starts paying.
2007-02-05 06:25:14 · answer #5 · answered by Mathew C 5 · 0⤊ 0⤋