THE REVERE ADVOCATE – FRIDAY, FEBRUARY 9, 2024 Page 15 ROTH IRA ACCOUNTS Notice is hereby given in accordance with the provisions of Chapter 185 of the Acts of 1983, and Chapter 13 of the will conduct a Public Hearing on February 15, 2024 at regulations of the City of Revere: Public Hearing: and voted on: signalized intersection operations and reduce Harris/Eustis intersections and provide the City of Revere an allowance, to be used at the City’s in the area. by adding the following: Attest: – Acting Chairman: Frank Stringi February 09, 2024 For Advertising with Results, call The Advocate Newspapers at 781-286-8500 or Info@advocatenews.net BUYER1 BUYER2 T he Taxpayer Relief Act of 1997 created the ROTH IRA eff ective January 1, 1998. Although ROTH IRA’S are not tax deductible, if certain requirements are met, the earnings can be withdrawn tax free. Furthermore, the so-called “minimum distribution rules” that apply to Traditional IRA’S do not apply to ROTH IRA’S. Traditional IRA’S require withdrawals no later than April 1 following the Calendar Year in which the owner reaches age 73. Earnings in a ROTH IRA can accumulate tax-free during the owner’s lifetime. An individual can contribute the lesser of his or her earned income for the year or $6,500 to either a ROTH IRA or a Traditional IRA. The Taxpayer, however, must meet certain adjusted gross income (AGI) limitations. In addition, the owner may still participate in an employer-sponsored retirement plan. If you are age 50 or older, you can contribute an additional $1,000 to a Roth IRA or Traditional IRA. For single Taxpayers, eligibility phases out with AGI between $138,000 and $153,000 and for married, fi ling joint Taxpayers, eligibility phases out with AGI between $218,000 and $228,000. For a married, fi ling joint Taxpayer, if the couple’s AGI is less than $218,000, and the working spouse has at least $6,500 in earned income, then each spouse can contribute $6,500 to a ROTH IRA. This is so even if the non-working spouse has no earned income. The nonworking spouse in eff ect “borrows” the earned income of the other spouse. If you are an active participant in a qualifi ed retirement plan, and a single taxpayer, your contribution to a Roth IRA is phased out with AGI between $73,000 and $83,000. If you are married fi ling a joint tax return, the contribution is phased out with AGI between $116,000 and $136,000. For a spouse who is not an active participant in a qualifi ed retirement plan, the Roth IRA contribution is phased out with AGI between $218,000 and $228,000. Why contribute to a ROTH IRA? The benefi ts of “tax-free” earnings are simply too good to ignore. You may, however, still decide to contribute to a Traditional IRA if you (i) expect to retire relatively soon; (ii) you expect that your tax bracket will signifi cantly drop during retirement; (iii) you will need the funds soon; (iv) and you plan on investing the savings in tax dollars generated from the Traditional IRA contribution itself. If you were to be laid off, switch jobs or retire, tremendous fl exibility is gained when viewing basic ROTH IRA planning. When you terminate your employment, your 401(k) balance, for example, can be rolled over first into a Traditional IRA “roll-over” account. This would constitute a taxfree “roll-over.” From there, you could convert the Traditional IRA to a ROTH IRA. This would constitute a taxable conversion. You have the fl exibility of determining in which calendar years to perform the conversion, based upon whether or not you had been working in a particular calendar year, whether or not your other income is unusually low in a particular year, or whether or not you had suffi cient mortgage interest or real estate tax deductions to help offset the “conversion” income. One problem with Traditional IRA’S is that the “deferred income” is ultimately taxed to the benefi ciaries. Under the Secure Act, non-spousal benefi ciaries have 10 years to withdraw the account balance as opposed to over his or her life expectancy. This is a game changer. With ROTH IRA’S, the income when received is received “tax free.” Furthermore, tax-free growth can continue after your death unlike with a Traditional IRA. Spousal benefi ciaries can establish their own Spousal Roth IRA account and continue with tax deferral. There would be no required minimum distributions during the surviving spouse’s lifetime, unlike with a Traditional IRA account. Children old enough to earn income should be encouraged to earn at least $6,500 per year in order to contribute to a ROTH IRA. This will result in a tremendous benefi t based upon many years of contributions. The investment accumulates income tax free. One often overlooked benefi t of a ROTH IRA is found in the Medicaid Planning area. An individual who foresees the possibility of being admitted into a nursing home, expecting to apply for MassHealth benefi ts, could withdraw the account balance and place into an irrevocable trust in order to commence the five-year look back period. None of the withdrawal would be taxable so there is a much greater incentive to take action to protect the assets in the Roth IRA. This is not the case with a Traditional IRA account. The entire withdrawal would be taxable. Once the required fi veyear look back period is satisfi ed, that individual may be eligible for MassHealth benefi ts as a result of having transferred the countable ROTH IRA assets from his or her name.. ROTH IRA’S off er signifi cant planning opportunities. If you are eligible to make a contribution, it is almost always a good idea to do so. A ROTH IRA contribution must been made by April 17, 2024 for Calendar Year 2023. Joseph D. Cataldo is an Estate Planning/Elder Law Attorney, Certifi ed Public Accountant, Certifi ed Financial Planner, AICPA Personal Financial Specialist and holds a Master’s Degree in Taxation. Copyrighted material previously published in Banker & Tradesman/The Commercial Record, a weekly trade newspaper. It is reprinted with permission from the publisher, The Warren Group. For a searchable database of real estate transactions and property information visit: www.thewarrengroup.com Jesus, Maria D REAL ESTATE TRANSACTIONS SELLER1 SELLER2 Rus c Ft Rus c, Richard ADDRESS DATE PRICE 30 Jarvis St. Revere 01.24.24 560000 Revere
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