Are profit-sharing contributions tax deductible? How do I value a company in my IRA that went bankrupt? In today’s episode of AdMail, Adam answers these questions and more.
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About IRA Financial:

IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(k) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

IRA Financial is a retirement account facilitator, document filing, and do-it yourself document service, not a law firm. IRA Financial Group does not provide legal services. No attorney-client relationship exists between Client and IRA Financial, its management, salespersons or IRA Financial’s in-house legal counsel. IRA Financial Group provides IRA retirement facilitation service and CANNOT provide Client with legal, investment, or financial advice. Prior to making any investment decisions, please consult with the appropriate legal, tax, and investment professionals for advice.

IRA Financial is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association & a Committee of Publishers and Associations.). The scope of Professional Services does not include the costs of any custodian related services.

Learn More:
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0:00 Intro
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1:18 Tax Deductible Contributions
If I elect to do a Roth employer profit-sharing contribution for my Solo 401(k), will they be tax deductible? YouTube
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2:57 Valuing an IRA After Bankruptcy
How do I value my IRA if I lost my investment because the company, I invested in went bankrupt? Harold T Houston, TX
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5:13 Contributing with an Inherited IRA
I want to contribute to my IRA this year. If I have an inherited IRA, can I use the inherited IRA distribution to contribute to the IRA? Ben S, Cambridge, MA
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7:07 Outro…(read more)

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ADMAIL 156: Tax Deductible Contributions, Inherited IRAs, and Bankruptcy

Tax season is upon us, and many individuals are looking for ways to maximize their deductions and save money on their taxes. In this edition of ADMAIL 156, we will explore the rules and limitations on tax deductible contributions, the rules surrounding inherited IRAs, and the implications of bankruptcy on your financial situation.

Tax Deductible Contributions:

For many individuals, making tax deductible contributions to retirement accounts such as 401(k)s and IRAs is a key strategy for reducing their taxable income. However, there are limitations on how much you can contribute and still receive the tax deduction.

For 2021, the maximum contribution to a traditional IRA is $6,000 for individuals under 50, or $7,000 for those 50 and older. For 401(k)s, the maximum contribution is $19,500 for individuals under 50, with an additional $6,500 catch-up contribution allowed for those 50 and older.

It’s important to note that these limits are subject to change on an annual basis, so it’s important to stay updated on the current rules and limitations to ensure you’re maximizing your tax deductible contributions.

Inherited IRAs:

Inheriting an IRA can be a complex financial matter, especially when it comes to the tax implications. Generally, non-spouse beneficiaries of an inherited IRA must begin taking required minimum distributions (RMDs) based on their life expectancy. Failure to do so can result in steep tax penalties.

There are also specific rules surrounding the distribution of inherited IRAs for spouses, minor children, and non-individual beneficiaries such as trusts and estates. It’s important to consult with a financial advisor or tax professional to ensure you’re following the appropriate rules and maximizing the benefits of an inherited IRA.

Bankruptcy:

Bankruptcy is a legal process that can provide relief to individuals and businesses struggling with overwhelming debt. However, it’s important to understand the implications of bankruptcy on your financial situation, including its impact on tax deductible contributions and retirement accounts.

While most contributions to retirement accounts are protected in bankruptcy, it’s essential to consider the type of retirement account and the specific rules in your state. Additionally, the timing of contributions and the use of retirement funds during bankruptcy can have different tax consequences.

It’s crucial to seek the advice of a qualified bankruptcy attorney and tax professional before making any decisions related to bankruptcy and retirement accounts.

In conclusion, understanding the rules and limitations on tax deductible contributions, inherited IRAs, and bankruptcy is vital for maximizing your tax savings and protecting your financial future. Consulting with qualified professionals is essential to ensure you’re making informed decisions that will benefit your long-term financial well-being.