Tax Time Q&A

Q: I am 61 years old; may I contribute $6,500 to each of my IRAs?

A: No. The contribution limit is an aggregate limit for all traditional and Roth IRAs you have.

Q: Are all IRA contributions tax deductible?

A: No. Roth IRA contributions are never tax deductible. The deductibility of contributions to your traditional IRA may be limited due to factors that include things like you are covered by a work place retirement plan or your income exceeds certain limits.

Q: I have over $100,000 in my old 401(k). I want to rollover my 401(k) to an IRA this year but will the $5,500 IRA contribution limit apply?

A: No. Rollovers from a work place plan to an IRA are not subject to the regular IRA contribution limitation of $5,500 ($6,500 if age 50 or older).

Q: May I deduct losses in my IRA on my 2015 tax return?

A: Not unless you withdraw the entire balance from all of your IRAs of the same type. Losses and gains are not taken into account on your tax return while your IRA is still open.

Q: Am I subject to the Net Investment Income Tax?

A: This 3.8% tax applies to certain net investment income of individuals, estates and trusts that have income above statutory threshold amounts, so whether you are subject to it depends on your individual situation. Your tax professional can help you determine the answer.