Self-Directed IRA's
What is a Self-Directed IRA?
A Self-Directed (IRA) Individual Retirement Account is a type of IRA in which the account owner must make all of the investments and decisions on behalf of the retirement plan. The IRS requires a qualified trustee or custodian to hold the assets of the IRA on behalf of the IRA's owner. The assigned trustee or custodian maintains the assets and all the transaction records of the IRA.
How can a Self-Directed IRA benefit me?
Since having a Self-Directed IRA allows a variety of investment choices, it will drastically improve an account owner's opportunities to expand their IRA portfolio.
The importance of seeking professional advice before opening a Self-Directed IRA
It is extremely importance for an individual interested in a Self-Directed IRA to obtain assistance and information from an IRA professional or certified financial planner. When opening a Self-Directed IRA account, there are many codes and regulations that must be followed closely to avoid legal complications. Many individuals falsely believe that the qualified trustee or custodian assigned to overlook the account is able to make them aware of any regulations that may have been broken. In reality, a custodian must follow all direction given by the owner of the account and is unable to provide any legal or tax advice.
Am I eligible for a tax deductible Self-Directed IRA?
There are guidelines that can be followed to determine if you are eligible for a tax-deductible IRA.
- If your employer provides no retirement plan and you are under 70-1/2 years old, you are eligible to invest in a deductible IRA and can deduct the full amount from your taxes.
- If your employer provides a 401(k) pension plan, it is possible to deduct all or a portion of your contribution if your adjusted gross income qualifies.
- If you do not have a retirement plan but your spouse does, you may be eligible for a full or partial deduction by filing join taxes and your joint adjusted gross income is below $166,000.
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