Investment and Finance
The most frequently asked tax questions related to Investment and Finance
For Tax Payers
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You can withdraw your Roth contribution anytime with no penalty. However, the portion of the interest earned or growth will need to remain in the account for 5 years prior to the withdrawal in order to avoid the early penalty of 10% for the federal. Please be aware that some states impose an early withdrawal penalty as well. Assuming you are over 59 1/2 years, you won't need to be concerned about the penalty on the portion of the growth as long as it stays in your account for 5 years. There is an interesting fact that the 5 year period starts counting down with the first account opening. All subsequent Roth money contributed will be part of the original contribution.
For 2018 the 15% rate applies once the following income limits are met: a. Joint returns - $77,200
b. Head of Household returns - $51,700
c. Single returns - $38,600
d. Married Separate returns - $38,600
e. Trusts and Estates - $2,600
For 2018 the 20% rate will apply to long-term capital gains and qualified dividends above these income levels:
a. Joint returns - $479,000
b. Head of Household returns - $452,400
d. Married Separate returns - $239,500
e. Trusts and Estates - $12,700
Prior to the Act, a 0% capital gain rate applied to capital gains where the taxpayer is paying in the 10% or 15% rate on ordinary income; a 15% capital gain rate applied to any taxpayer paying any other rate below 39.6%; and a 20% rate applied to the high-income taxpayers paying 39.6% on ordinary income.
For a participant who separated from service before January 1, 2016, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2015, by 1.0011.
The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.
In 2015, the AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $61,000 for married couples filing jointly, up from $60,000 in 2014; $45,750 for heads of household, up from $45,000; and $30,500 for married individuals filing separately and for singles, up from $30,000.