Tax Treatment of Individual Retirement Arrangements

  • Credits: 3
  • Format: Self-Study eBook
  • Field of Study: Federal Tax Law
  • Author/Speaker: Paul J. Winn, CLU, ChFC
Course ID: Advanced Preparation: Experience Level:
EWTFM-T-01693-21-S | 6233-CE-0416 None Overview
Published Date: Program Prerequisites: Other Course Formats:
© April 2021 General Understanding of Taxes Self-Study eBook
COURSE DESCRIPTION

The Employee Retirement Income Security Act (ERISA) created an individual retirement arrangement—usually referred to simply as an IRA—to allow people who had no other employer-sponsored qualified plan to have certain tax support for a retirement program. That was the initial legislative action. To participate, you needed to be employed and not a participant in a pension, profit-sharing, or other qualified plans.

These early ERISA provisions offering tax benefits to individuals funding IRAs have been extended in subsequent legislative actions to include:

  • Unemployed spouses;
  • Qualified retirement plan participants; and
  • Taxpayers preferring tax-free distributions instead of deductible contributions.

Early expansion of the IRA provisions added a spousal IRA that is designed to provide retirement assistance to uncompensated homemakers. It was also expanded to allow employees who are covered under an employer-sponsored qualified pension or profit-sharing plan to contribute to an IRA.

Since that earlier ERISA expansion related to IRAs, new IRAs have been added, including Roth IRAs that offer tax-free qualified distributions rather than deductible contributions. To differentiate the newer Roth IRA from its earlier cousin, the original IRA is now referred to as a “traditional” IRA.

Learning Objectives:

After reading the course material, you will be able to:

  • Apply the rules governing eligibility for and contributions to traditional and Roth IRAs;
  • Identify the requirements and benefits related to a spousal IRA;
  • Apply the tax treatment rules concerning contributions to and distributions from traditional and Roth IRAs; and
  • Distinguish between traditional and Roth IRA distribution rules.

Who Should Attend:
  • All Certified Public Accountants (CPAs)
  • Enrolled Agents (EAs)
  • Tax Return Preparers (TRPs)

Qualifies and Approved with all State Boards of Accountancy and the following sponsorship’s:
NASBA
IRS
CTEC