- 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|
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.
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)