Everytime we use a Roth IRA Calculator on the internet, it shows that we would not benefit from a Roth, we should go with a Traditional. We don't have a 401K, is that why we should go w/ a Traditional, since it's tax deductible? Any suggestions?

Is there somewhere I can use stock only for a ROTH. I do not want Mutual Funds, and want only stocks that I like, that have a DRIP.

Please suggest somewhere, or is what I want not possible.

Thanks,

Norm

Every thing I read states that if you are married filing separately, you are not eligible to convert to a ROTH and use the 4 year tax pay period.

If you are married, but did not live with your spouse at any time during 1998, can you do the conversion if you file separately. I was legally separated during 1998 which still leaves my status as married.

Thanks for any response

The definition of compensation for S/E individuals relating to SIMPLES is different than that of qualified plans. The SIMPLE definition found at IRC 408(p)(6)(A)(ii) refers to "net earnings from self-employment" (line 4 on Schedule SE)

It then goes on to say "without regard to any contribution under this subsection"

What does "without regard" mean?

Without regard - therefore ignore the SIMPLE matching contributions as if they are not made (i.e. include the matching in eligible comp to determine the matching)?

OR

Without regard - therefore back out the SIMPLE matching contributions to get net comp - similar to the normal S/E calculation?

The normal S/E calc is determined by following IRC 401©(2)(A). In section (iv) it states "without regard to items which are not included in gross income for purposes of this chapter (401). Here it appears that "without regard" means back out the qualified plan contributions to get net comp to determine the qualified plan contributions, in other words the usual circular calculation.

In the IRA Answer Book (Gary are you out there?) it appears that they interpret 408(p)(6)(A)(ii) "without regard" to mean to include in eligible comp those SIMPLE matching contributions.

Anyone covered this ground yet?

I understand that when determining S/E comp there is no requirement to back out 1/2 of the S/E tax as the earned income definition in 401©(2) does not apply to SIMPLEs.

[This message has been edited by Dawn Hafner (edited 03-23-99).]

Can someone offer some explanation to question #11 from the 06/04/98 exam?

My husband recently left a company and received his COBRA papers. The notification listed the option of taking medical, dental, and RX all together. His new job doesn't offer dental for 1 year, so I called to see if they would offer only the dental COBRA and they said that it was all one plan and couldn't be separated.

The problem is that it isn't one plan. The medical is an HMO and the Dental is through another carrier. Is this legal since they are two separate plans? I have always been under the impression that you must offer the COBRA for each plan seperately.

Any help you can give will be appreciated. I really don't want to wait an entire year for coverage. Thanks.

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Robin

In 3/98, we incorrectly withheld 10% when converting a client's IRA to a Roth and it is now too late to get the money back from the IRS. Are we permitted to reverse & reprocess this transaction as if the withholding never ocurred and issue a corrected 1099-R to the IRS and the client?

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Steve

Can employees increase or decrease their before-tax medical contributions under the premium only portion of a section 125 cafeteria plan if the employer increases employee contribution rates during the middle of the cafeteria plan's year?

Is it permissible for an entity to make one participant's 457 contributions (an entity official's for example) and yet not make any other participant's contributions? This would not be a matching contribution (in which case I understand the entity is permitted to define whatever matching class it desires).

anybody have any experience in dealing with, or review issues related to, multiple employer cafeteria plans (i.e., cafeteria plan in which two or more unrelated employers participate). I havn't figured out whether the IRS even permits these type of arrangements and, if so, the 5500 reporting requirements, etc. thanks for the help.

We have a credit union client that is a 501©(14) corp. Do special rules apply as to the allowable maximums for total employer-employee contributions? They would like to terminate their DB plan and roll over the money to the 401(k). The employer will contribute 8% of pay with an additional match of $.50/$1.00 up to 6% of pay. This possible maximum employer contribution of 11% leaves little room for employee money when the normal max. is 15% of compensation.

------------------

booker

A 45 year old converts a traditional IRA into a Roth IRA in 1998. In 1999 this individual takes a full distribution from the ROTH and within 60 days successfully rolls it into another ROTH

IRA (or back into the original ROTH).

Does the completion of the rollover avoid application of the 10% early withdrawal penalty OR will the penalty be imposed because of the withdrawal of the conversion monies within the non-exclusion period for the converted funds?

Yes, this is a real circumstance.

Yes, I'm looking for an authoritative answer.

Yes, my thanks to you on the Message Board for your input.

Your Fearless Moderator,

Dave Hammond--Sentinel Retirement Services, Wakefield, MA

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We have come across a situation where a participant/shareholder has named his company as beneficiary of his MP/PS benefits. There is no QJ&S issue and no concern over the 401(a)(9)rules. My question is does anyone feel this is prohibited by ERISA or could be void for any other reason.

Any thoughts would be appreciated

This Bill was introduced on March 16, 1999 by Senator Roth.

Highlights:

* Increases annual IRA contribution limit from 2k to 5k.

* Eliminates income limits on IRA contributions.

* Raises the income limit for converting traditional IRAs to Roth from

100k to $1M.

* Increases the annual limit on 401(k) contributions from 10k to 15k.

* Establishes a new "Roth" 401(k) plan which allows you to contribute after-

tax dollars to your 401(k). Withdrawals at retirement will (should) be tax-free.

I urge everyone to write their US Senators and request their support on this. It is a beautiful piece of legislation.

To get the email addresses of your Senators, go to this site and enter your zip code:

http://www.congress.org/search.html

Additional information on the bill:

http://thomas.loc.gov/cgi-bin/bdquery/z?d106:s.00646:

Here is a sample letter for reference.

-Richard

================================

Dear Senator .......,

I am writing to encourage you to support Senate Bill S.646 to "amend the Internal Revenue Code of 1986 to provide increased retirement savings opportunities". This bill was introduced by Senator Roth on March 16, 1999.

I'm sure you are aware that the IRA contribution limit has not been raised

from it's present level of $2000 in nearly 20 years. Senator Roth's bill

will adjust the limit to account for cost of living increases. Additionally, this bill eliminates the ridiculous income limits on Roth IRA contributions as well as increasing the income limits for converting traditional IRAs to Roth IRAs. The limits currently in place are creating tremendous headaches for your middle-income constituents.

I hope that you will lend your full support to S.646.

Regards,

.........

Has anyone set up or heard anything regarding pension plans for volunteer fire fighters? There is no salary, and the township wants to contribute an annual discretionary amount without paying taxes on it. This is new to me. Any ideas?

Can a distrbution from a 403(B) plan be rolled into a 401(k) plan? I don't think so, but can't locate authority. Thanks.

I opened a Roth in early '98, subsequently my income increased, based on one time occurrences, so that it is now beyond the permissible limits. Must I reverse the Roth now into a regular IRA or can I keep the Roth and simply pay a tax?

Is it legal to use a Roth IRA to sell covered calls or puts? Most of the brokerages i've seen require a margin account to handle these transactions, so i guess the question is can a Roth IRA account be a margin account?

My company pays for 100% of the monthly health premium for spouse and dependents. Spouses are opting out of their plans and enrolling in our plan at a high frequency. We have always been "employee friendly" and very proud that we paid 100% of the premium for the employees. However, now with so many companies offering opt outs and more employees have working spouses, we feel that we are being taken advantage. One thought was that we pay for the spouse's premium at their company or provide a "set" allowance for all spouses in which to pay their own premium. Any comments on these alternatives or any other alternatives? Thanks.

Can an officer start to flex health insurance during the middle of the year, if he hadn't completed a form prior to the beginning of the year? The company paid for the officer's health insurance previously but is not going to be paying it anymore.