Phasing out the myRA program

What’s happening?

The U.S. Department of the Treasury has decided to phase out the myRA® retirement savings program, and the program is no longer accepting new enrollments. Existing accounts can remain open until further notice.

 

 

 

What is happening to my account?

Your account remains open and you can continue to manage your account until further notice. The funds in your account remain in an investment issued by the U.S. Department of the Treasury. We’ll be in touch over the coming weeks with next steps and relevant deadlines regarding the transfer or closure of your account. In the meantime, we want you to know any myRA with a zero ($0) balance as of September 15, 2017 or later, will be subject to possible automatic closure beginning on September 18, 2017.

Is my money safe?

Yes. The funds in your account are safe and remain in an investment issued by the U.S. Department of the Treasury.

What do I need to do?

We will be reaching out to all of our account holders with more information regarding the transfer or closure of your account. We will provide account holders with additional information in the coming weeks that outlines when we’ll stop accepting and processing deposits. We recommend you log in to your account to make sure your contact information is complete and up to date. You can also update your information by contacting customer service.

How do I transfer my myRA account to another Roth IRA provider where I can save and invest?

You can initiate a direct transfer of your full account balance to another Roth IRA at any time. To do so, you will first want to identify or open an account at the new Roth IRA provider where you will continue to save and invest. Then, by working with a new Roth IRA provider you select, you can transfer your myRA balance to your new Roth IRA. By opening another Roth IRA and working with the new Roth IRA provider to initiate a transfer of the funds in your myRA to your new Roth IRA, you avoid withholding and potential tax liabilities (including potential tax penalties) that may apply to earnings if funds are paid directly to you.

How can I learn more about rules related to transfers and 60-day rollovers to another Roth IRA?

You can learn more at myRA.gov or at irs.gov/rollovers.

How can I close my account?

To request closure of your account, call myRA customer support at 855-406-6972 or TTY/TDD 855-408-6972 or International 414-365-9616. Please remember that a myRA follows Roth IRA rules. To avoid tax liabilities that may apply to earnings if funds are paid directly to you, you will need to deposit the amount of your distribution (including any tax withholding) into a private-sector Roth IRA within 60 days of the distribution. For more information about Roth IRA distributions, visit myRA.gov/roth-ira.

Why did I receive an additional payment from myRA after I withdrew all the funds from my account?

You may have received an additional payment due to a timing difference between when interest earned was reflected in your account balance, and when you requested a withdrawal (or distribution). When necessary, these additional interest payments are made to ensure

account owners receive their full account balances.

Who can I contact for more information?

You may contact our Call Center Monday through Friday from 8 a.m. to 8 p.m., E.T. at 855-406-6972.

Source: usa.gov

contact@officetaxservices.com

(858)247-1680

  

IRA Tax Tips for the 2016 Tax Year

Taxpayers often have questions about Individual Retirement Arrangements, or IRAs. Common questions include: When can a person contribute, how does an IRA impact taxes, and what are other common rules.
The IRS offers the following tax tips on IRAs:

• Age Rules. Taxpayers must be under age 70½ at the end of the tax year to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.
• Compensation Rules. A taxpayer must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If a taxpayer is married and files a joint tax return, only one spouse needs to have compensation in most cases.
• When to Contribute. Taxpayers may contribute to an IRA at any time during the year. To count for 2016, a person must contribute by the due date of their tax return. This does not include extensions. This means most people must contribute by April 18, 2017. Taxpayers who contribute between Jan. 1 and April 18 need to advise the plan sponsor of year they wish to apply the contribution (2016 or 2017).
• Contribution Limits. Generally, the most a taxpayer can contribute to their IRA for 2016 is the smaller of either their taxable compensation for the year or $5,500. If the taxpayer is 50 or older at the end of 2016, the maximum amount they may contribute increases to $6,500. If a person contributes more than these limits, an additional tax will apply. The additional tax is six percent of the excess amount contributed that is in their account at the end of the year. 
• Taxability Rules. Normally taxpayers don’t pay income tax on funds in a traditional IRA until they start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.
• Deductibility Rules. Taxpayers may be able to deduct some or all of their contributions to their traditional IRA.
• Saver’s Credit. A taxpayer who contributes to an IRA may also qualify for the Saver’s Credit. It can reduce a person’s taxes up to $2,000 if they file a joint return.
• Rollovers of Retirement Plan and IRA Distributions. When taxpayers roll over a retirement plan distribution, they generally don’t pay tax on it until they withdraw it from the new plan. If they don’t roll over their distribution, it will be taxable (other than qualified Roth distributions and any amounts already taxed). The payment may also be subject to additional tax unless the taxpayer is eligible for one of the exceptions to the 10% additional tax on early distributions.
• myRA. If a taxpayer’s employer does not offer a retirement plan, they may want to consider a myRA. This is a retirement savings plan offered by the U.S. Department of the Treasury. It's safe and affordable. Taxpayer’s may also direct deposit their entire refund or a portion of it into an existing myRA.

Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity.

Source: Internal Revenue Service

contact@officetaxservices.com

(858)247-1680

Changes for 2017

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions.  If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)    Here are the phase-out ranges for 2017:

• For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000, up from $61,000 to $71,000.
• For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000, up from $98,000 to $118,000.
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
• For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000.  For married couples filing jointly, the income phase-out range is $186,000 to $196,000, up from $184,000 to $194,000.  The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
 
Source: Internal Revenue Service.

contact@officetaxservices.com

(858)247-1680