Establishing and Funding IRAs
Learning Objectives
After completing this session, you will be able to
define the purpose and tax advantages of Traditional and Roth IRAs,
identify the IRA contribution eligibility requirements,
discuss the process for establishing an IRA application,
discuss the IRA contribution limit and deadline, and
discuss the process for documenting a contribution.
©2012 Ascensus, Inc.
Page 1
Introduction to IRAs
I • Individual
account
• Cannot be owned by a nonperson entity
©2012 Ascensus, Inc.
Page 1
Introduction to IRAs
I • Individual
account
• Cannot be owned by a nonperson entity
R Studies show
most members will need to rely on personal savings for 80 percent of their post-retirement income
©2012 Ascensus, Inc.
Page 1
Introduction to IRAs
I • Individual
account
• Cannot be owned by a nonperson entity
R Studies show
most members will need to rely on personal savings for 80 percent of their post-retirement income
A • One application
= One IRA
• Account can contain several investments
©2012 Ascensus, Inc.
Page 1
Introduction to IRAs
Introduction to IRAs
Page 1 ©2012 Ascensus, Inc.
Introduction to IRAs
Traditional IRA Roth IRA
Page 1
Benefits to Account Holders
©2012 Ascensus, Inc.
Introduction to IRAs
Tax-deferred earnings
Traditional IRA Roth IRA
Page 1
Benefits to Account Holders
©2012 Ascensus, Inc.
Introduction to IRAs
Tax-deferred earnings
Regular contributions may
be tax-deductible
Traditional IRA Roth IRA
Page 1
Benefits to Account Holders
©2012 Ascensus, Inc.
Introduction to IRAs
Tax-deferred earnings
Regular contributions may
be tax-deductible Earnings may be withdrawn
income tax-free
Traditional IRA Roth IRA
Page 1
Benefits to Account Holders
©2012 Ascensus, Inc.
Contribution Eligibility
Page 2 ©2012 Ascensus, Inc.
Contribution Eligibility
Page 2
Anyone may establish an IRA. Eligibility requirements may limit how much
an individual may contribute to an IRA.
©2012 Ascensus, Inc.
Traditional
IRAs
Roth
IRAs
Earned
Income
Contribution Eligibility
Earned income includes
amounts derived from or
received for personal services
rendered (e.g. IRS Form W-2,
Wage and Tax Statement,
Schedule C, Profit or Loss
From Business if self-
employed, or Schedule F, Profit
or Loss From Farming.
Page 2
Anyone may establish an IRA. Eligibility requirements may limit how much
an individual may contribute to an IRA.
©2012 Ascensus, Inc.
Wages
Salaries
Tips
Commissions
Taxable alimony
Professional fees
Bonuses
Combat pay
Royalties*
Interest
Dividends
Rental Income
Unemployment compensation
Disability pay
Child support
Separation & early retirement
AFDC & TANF*
Contribution Eligibility
©2012 Ascensus, Inc.
Page 2
Social Security
Wages
Salaries
Tips
Commissions
Taxable alimony
Professional fees
Bonuses
Combat pay
Royalties*
Interest
Dividends
Rental Income
Unemployment compensation
Disability pay
Child support
Separation & early retirement
AFDC & TANF*
Contribution Eligibility
Earned Income Not Earned Income
©2012 Ascensus, Inc.
Page 2
Social Security
Traditional IRA
• Earned Income
• Age – An account holder must
not attain age 70½ or older
any time during the year for
which the contribution is made.
Note: Once the account holder
reaches age 70½, they must
begin removing assets from the
IRA. This is called a required
minimum distribution (RMD).
Page 3
Contribution Eligibility
©2012 Ascensus, Inc.
Roth IRA
• Earned Income
• Income Limit – An account
holder’s modified adjusted gross
income (MAGI) must not exceed
the IRS limits.
Page 3
Contribution Eligibility
©2012 Ascensus, Inc.
Apply Your Knowledge: Contribution Eligibility
1. Meredith is single, 35, and works as a doctor. She receives earned income of $80,000 per year. Can Meredith make a contribution to a Traditional IRA? (Yes or No)
©2012 Ascensus, Inc.
Page 3
[Yes]
Apply Your Knowledge: Contribution Eligibility
2. Derek is married, 38, and is a mechanic. He and his wife file a joint federal income tax return. Their combined earned income is $84,000 per year and they have a combined MAGI of $90,000 per year. Can Derek contribute to a Roth IRA? (Yes or No)
©2012 Ascensus, Inc.
Page 3
[Yes]
Apply Your Knowledge: Contribution Eligibility
3. George is single, 75, and is a maintenance worker. He has earned income of $35,000 per year. Can George contribute to a Traditional IRA? (Yes or No)
©2012 Ascensus, Inc.
Page 3
[No]
Establishing an IRA
©2012 Ascensus, Inc.
Page 4
©2012 Ascensus, Inc.
Establishing an IRA
©2012 Ascensus, Inc.
Page 4
The first step in establishing an IRA with the prospective account holder is to provide information without giving tax advice.
• Explain the rules, but do not apply the rules to the individual’s situation.
• Identify the type of IRA the individual wishes to establish, describe investment options available at the credit union, etc.
©2012 Ascensus, Inc.
Establishing an IRA
©2012 Ascensus, Inc.
Page 4
The first step in establishing an IRA with the prospective account holder is to provide information without giving tax advice.
• Explain the rules, but do not apply the rules to the individual’s situation.
• Identify the type of IRA the individual wishes to establish, describe investment options available at the credit union, etc.
Second, to establish the IRA, the credit union must provide the following documents:
©2012 Ascensus, Inc.
Establishing an IRA
Required Documents • Plan Agreement
• Disclosure Statement
• Financial Disclosure
Regulatory Document • Truth-in-Savings Disclosure
Optional Document
• Application (required by some financial organizations)
©2012 Ascensus, Inc.
Page 4
©2012 Ascensus, Inc.
Establishing an IRA
©2012 Ascensus, Inc.
Page 4
To accurately administer the
IRA, the application requests
the account holder’s
• Legal name, taxpayer
identification number,
address and date of birth.
©2012 Ascensus, Inc.
Required Documents
©2012 Ascensus, Inc.
Pages 8 - 9
Required Documents
The plan agreement serves as
the “contract” between the credit
union and the individual for
whom the IRA is created.
©2012 Ascensus, Inc.
Pages 8 - 9
Required Documents
When establishing an IRA, the credit
union must provide an up-to-date
disclosure statement, which explains
the IRA rules in nontechnical
language.
©2012 Ascensus, Inc.
Pages 8 - 9
Required Documents
The credit union must provide
financial projections as part of the
disclosure statement.
• helps account holders visualize
their IRA investment growth, and
• allows account holder to compare
investments
©2012 Ascensus, Inc.
Pages 8 - 9
Apply Your Knowledge: Establishing an IRA
1. When completing the application the account holder is required to name beneficiaries (Yes or No).
©2012 Ascensus, Inc.
Page 9
[No]
Apply Your Knowledge: Establishing an IRA
2. The account holder must sign the application to establish the IRA (Yes or No).
©2012 Ascensus, Inc.
Page 9
[Yes]
Apply Your Knowledge: Establishing an IRA
3. What are the five documents that are required to be given to the account holder upon the opening of an IRA?
©2012 Ascensus, Inc.
Page 9
[Copy of Signed Application, Plan Agreement, Disclosure Statement, Financial Disclosure and TIS]
Apply Your Knowledge: Establishing an IRA
4. How often must the financial disclosure be given to the account holder?
©2012 Ascensus, Inc.
Page 9
[Once]
IRA Contributions
©2012 Ascensus, Inc.
Pages 10 - 11
IRA Contributions
Contribution Limit
Traditional and Roth IRA Aggregate
Annual Regular Contribution Limits
Tax Year Annual Regular
Contribution Limit
Additional “Catch-Up” Contribution
for Account Holders Age 50 and
Older
2012 $5,000 $1,000 ($6,000 total)
©2012 Ascensus, Inc.
Pages 10 - 11
Example: Contribution Limit Kevin, age 54, has a Traditional and a Roth IRA at ABC Credit Union. Assuming he is eligible to contribute to both IRAs, he could contribute $3,000 to his Traditional IRA and $3,000 to his Roth IRA for tax year 2012.
IRA Contributions
Contribution Limit vs. Individual Contribution Limit
If the IRA owner’s earned income is lower than the annual
contribution limit, the IRA owner may be eligible to contribute up to
100 percent of their earned income.
©2012 Ascensus, Inc.
Pages 10 - 11
Example: Individual Limit Julie, age 19, is a single college student who earned $2,500 working in the university bookstore for tax year 2012. Even though the IRS contribution limit is $5,000, her individual limit will be $2,500.
IRA Contributions
©2012 Ascensus, Inc.
Page 11
©2012 Ascensus, Inc.
IRA Contributions
A married account holder who does not
earn any or earns minimal earned
income and files a joint federal income
tax return for a year can treat the
couple’s joint earned income as their
own for purposes of determining the
maximum contribution limit.
©2012 Ascensus, Inc.
Page 11
Spousal Contribution Limit
©2012 Ascensus, Inc.
IRA Contributions
A married account holder who does not
earn any or earns minimal earned
income and files a joint federal income
tax return for a year can treat the
couple’s joint earned income as their
own for purposes of determining the
maximum contribution limit.
©2012 Ascensus, Inc.
Page 11
Spousal Contribution Limit
Husband’s Earned Income
+ Wife’s Earned Income
= Total Earned Income
Husband’s
IRA
Contribution
Wife’s IRA
Contribution
©2012 Ascensus, Inc.
IRA Contributions
Example: Spousal Contribution Limit
Kim and Matt, both 35, are married. Matt is
in graduate school and has no earned
income, and Kim is a dentist. As long as
Kim and Matt file a joint federal tax return,
Matt can use Kim’s earned income to
contribute to his Traditional IRA. If Kim
earns at least $10,000 in 2012, then they
can both contribute $5,000 to their own
IRAs for 2012.
©2012 Ascensus, Inc.
Page 11
Husband’s Earned Income
+ Wife’s Earned Income
= Total Earned Income
Husband’s
IRA
Contribution
Wife’s IRA
Contribution
©2012 Ascensus, Inc.
Apply Your Knowledge: Contribution Limit
1. Edward was born on December 30, 1964. What is his aggregate contribution limit for 2012?
©2012 Ascensus, Inc.
Page 12
[$5,000]
Apply Your Knowledge: Contribution Limit
2. Elise was born on April 19, 1962. What is her aggregate contribution limit for 2012?
©2012 Ascensus, Inc.
Page 12
[$6,000]
Contribution Deadline
©2012 Ascensus, Inc.
Page 12 - 13
Contribution Deadline
©2012 Ascensus, Inc.
Page 12 - 13
A current-year regular contribution can be made beginning on January
1 of that year.
The deadline to make regular contributions for a year is the deadline
for filing that year’s federal income tax return, generally April 15.
Contribution Deadline
January 1 December 31
2012 2013
©2012 Ascensus, Inc.
Page 12 - 13
A current-year regular contribution can be made beginning on January
1 of that year.
The deadline to make regular contributions for a year is the deadline
for filing that year’s federal income tax return, generally April 15.
Contribution Deadline
April 15 January 1 December 31
2012 2013
©2012 Ascensus, Inc.
Page 12 - 13
A current-year regular contribution can be made beginning on January
1 of that year.
The deadline to make regular contributions for a year is the deadline
for filing that year’s federal income tax return, generally April 15.
Contribution Deadline
April 15
Current Year
January 1 December 31
2012 2013
©2012 Ascensus, Inc.
Page 12 - 13
A current-year regular contribution can be made beginning on January
1 of that year.
The deadline to make regular contributions for a year is the deadline
for filing that year’s federal income tax return, generally April 15.
Contribution Deadline
April 15
Current Year Prior Year
January 1 December 31
2012 2013
©2012 Ascensus, Inc.
Page 12 - 13
A current-year regular contribution can be made beginning on January
1 of that year.
The deadline to make regular contributions for a year is the deadline
for filing that year’s federal income tax return, generally April 15.
Contribution Deadline
April 15
©2012 Ascensus, Inc.
Page 12 - 13
Prior-Year Regular Contributions
Under federal guidelines, the instruction to attribute a contribution to
the prior year must be in writing and is irrevocable.
• If there is no written instruction, assume the regular contribution is
for the current year.
• A prior-year regular contribution cannot be changed to a current-
year regular contribution.
Apply Your Knowledge: Contribution Deadline
1. What is the last date on which Henry can make a contribution for tax year 2012?
©2012 Ascensus, Inc.
Page 12
[April 15, 2013]
Apply Your Knowledge: Contribution Deadline
2. If Henry makes his 2012 contribution on February 12, 2013, what methods can he use to provide the written direction for a prior-year contribution?
©2012 Ascensus, Inc.
Page 12
[Any written instruction method accepted by the credit union]
Paul Kern CIS, CIP, CISP
608-229-1794
http://www.nafcu.org/ascensus
Q&A and Contact Information
Thank you for attending!
Establishing and Funding IRAs
Establishing and Funding IRAs
Learning Objectives
At the completion of this session you will be able to
define the purpose and tax advantages of Traditional and Roth IRAs,
identify the IRA contribution eligibility requirements,
discuss the process for establishing an IRA,
discuss the IRA contribution limit and deadline, and
discuss the process for documenting a contribution.
Icon Activity
Refer to Job Aids section of the material.
Indicates a group exercise.
Personal Objective(s)
I am attending this session so that upon completion I will be able to
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Other Resources
20%
Personal Savings
(Including IRAs) 80%
Post-Retirement Income
Introduction to IRAs
Definition of an IRA
I__________________
The IRA is an individual account, which means that it can only be owned by one account
holder.
A nonperson entity (e.g., a trust) cannot own an IRA, but a nonperson entity may be
named as an IRA beneficiary.
R_________________
Studies show most members will need to
rely on personal savings for up to 80
percent of their post-retirement income.
Source: www.ssa.gov
A_________________
One application = One IRA
An IRA may contain several investments.
Benefits to Account Holders
What are the benefits to the account holder?
Earnings are always tax-deferred.
Account holder does not receive an IRS Form 1099-INT, Interest Income for
earnings on an IRA.
Traditional IRA contributions may be tax deductible.
Roth IRA earnings may potentially be withdrawn income tax-free.
1
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Contribution Eligibility
Anyone may establish an IRA. Eligibility requirements may limit how much an individual
may contribute to an IRA. Account holders are responsible for determining if they are
eligible to make regular contributions.
The account holder must have earned income during the year for which the regular
contribution is made.
Earned income includes amounts derived from or received for personal services
rendered (e.g. IRS Form W-2, Wage and Tax Statement, Schedule C, Profit or Loss
From Business if self-employed, or Schedule F, Profit or Loss From Farming.
Sources of Income
Earned Income Not Earned Income
Wages
Salaries
Tips
Bonuses
Taxable alimony
Commissions
Professional fees
Combat pay
Interest
Royalties*
Dividends
Rental Income
Unemployment compensation
Disability pay
Child support
Separation & Early retirement
AFDC & TANF**
Social Security
*Whether royalties are considered earned income is dependent on several factors.
**Aid to Families with Dependent Children and Temporary Assistance for Needy Families
2
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Traditional IRA Eligibility
Anyone who meets both the following requirements is eligible
to make contributions to a Traditional IRA.
Earned Income
Age – An account holder must not attain age 70½
or older any time during the year for which the
contribution is made.
Once the account holder reaches age 70½, they must begin
removing assets from the IRA. This is called a required
minimum distribution (RMD).
Roth IRA Eligibility
Anyone who meets both the following requirements is eligible
to make contributions to a Roth IRA.
Earned Income
Income limit – An account holder’s modified
adjusted gross income (MAGI) must not exceed the
IRS limits.
MAGI Limits for Regular Roth IRA Contributions
Apply Your Knowledge: Contribution Eligibility
1. Meredith is single, 35, and works as a doctor. She receives
earned income of $80,000 per year. Can Meredith make a
contribution to a Traditional IRA? (Yes or No)
2. Derek is married, 38, and is a mechanic. He and his wife file a joint federal income
tax return. Their combined earned income is $84,000 per year and they have a
combined MAGI of $90,000 per year. Can Derek contribute to a Roth IRA? (Yes or
No)
3. George is single, 75, and is a maintenance worker. He has earned income of $35,000
per year. Can George contribute to a Traditional IRA? (Yes or No)
3
70½ Year: The 70½ year is
the year in which a person
reaches 70½ years of age.
For people born between
January 1 and June 30, the
70½ year will be the year
of their 70th
birthday. For
those born between July 1
and December 31, the 70½
year will be the year of
their 71st
birthday.
Modified Adjusted Gross
Income (MAGI): MAGI is
an individual’s adjusted
gross income without
taking into account
Traditional IRA deductions,
student loan interest
deductions, tuition and
fees deductions, certain
foreign income and foreign
housing exclusions and
deductions, certain Series
EE bond interest
exclusions, adoption
expense exclusions, and
domestic production
activities deductions.
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Establishing an IRA
The first step in establishing an IRA with the prospective account holder is to provide
information without giving tax advice.
Explain the rules, but do not apply the rules to the individual’s situation.
Identify the type of IRA the individual wishes to establish, describe the IRA
investment options available at the credit union, etc.
Second, to establish an IRA, the credit union must provide the following four
documents.
Plan agreement, disclosure statement, financial disclosure and Truth-In-Savings.
Note: Most credit unions require a member to complete an application when establishing an IRA.
Completing the IRA Application
Ascensus Traditional IRA Application (Form 2300-T)
Note: In today’s training we are going to use the Traditional IRA application. The concepts for completing
the Roth application are similar.
To accurately administer the IRA, the application requests the account holder’s
legal name, taxpayer identification number, address and date of birth.
4
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Beneficiary Designation
When establishing the IRA, the account holder may wish to designate beneficiaries.
Account holders are not required to name beneficiaries while completing the
application, but most will want to.
While completing the application in IRAdirect, there are three levels of available
beneficiaries.
Primary Beneficiary – receives first consideration for receiving the IRA assets after
the account holder’s death.
Secondary (or Contingent) Beneficiary – receives the IRA assets after the account
holder’s death if no named primary beneficiary qualifies to receive the assets.
Tertiary Beneficiary – receives the IRA assets after the account holder’s death if no
named secondary beneficiary qualifies to receive the assets.
Note: If the account holder would like to change their beneficiary designation or name one at a later time
they may do so throughout the lifetime of the account.
5
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Spousal Consent
Some states have community property or marital property laws that govern the
property rights of married individuals. If the account holder names a primary beneficiary
other than (or in addition to) their spouse, the spouse should sign the Spousal Consent
portion of the IRA application.
The account holder is not required to ask the spouse to sign, waiving their rights. It is
also not required that the spouse sign if asked.
Community/Marital Property States as of January 2012:
*Alaska Arizona **California Idaho
**Louisiana Nevada New Mexico Texas
Washington Wisconsin
* Alaska requires both spouses to “opt in” to community property law.
** While California and Louisiana have community property laws, they do not affect IRA death benefits if
there are designated beneficiaries.
Signatures and Date
It is very important that both the account holder and the credit union representative
sign the application. Without the account holder’s signature, there is no IRA.
6
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Plan Agreement
Ascensus Traditional IRA Agreement
The plan agreement serves as the “contract” between the credit union and the
individual for whom the IRA is created.
The purpose of the plan agreement is to disclose both the credit union and the account
holder’s responsibilities. The account holder must receive a copy of the plan agreement
upon opening the account.
Disclosure Statement
Ascensus Traditional IRA Disclosure Statement
When establishing an IRA, the credit union must provide an up-to-date disclosure
statement, which explains the IRA rules in nontechnical language.
The disclosure statement is written in a question and answer format.
It also contains a revocation provision that allows the account holder to revoke the
IRA within seven calendar days of receiving the statement.
Financial Disclosure
Ascensus Financial Disclosure
The credit union must provide financial projections as part of the disclosure statement.
This document must be provided to the account holder at account opening and is not to
be required to be amended even if the investment or rate changes. It is not required to
be in the account holder’s file if other documents state that the account holder
acknowledges receipt of a financial disclosure.
Apply Your Knowledge: Establishing an IRA
1. When completing the application the account holder is required to name
beneficiaries (Yes or No).
2. The account holder must sign the application to establish the IRA (Yes or No).
3. What five documents must the account holder receive upon the opening of an IRA?
4. How often must the credit union give the financial disclosure to the account holder?
7
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
IRA Contributions
Contribution Limit
The maximum amount individuals may contribute to their IRAs is referred to as the
“annual regular contribution limit.”
The annual regular contribution limit is determined by the IRS each year and may be
adjusted for COLAs.
Account holders who attain age 50 by December 31 of the year are eligible to
contribute an additional amount called a “catch-up contribution.” The catch-up
contribution can be made any time during the year in which the account holder
attains age 50 and for each subsequent year.
Traditional and Roth IRA Aggregate Annual
Regular Contribution Limits
Tax Year Annual Regular
Contribution Limit
Additional “Catch-Up” Contribution
for Account Holders Age 50 and
Older
2012 $5,000* $1,000 ($6,000 total)
* The $5,000 contribution limit may be adjusted for inflation in future years in $500 increments.
Source: www.irs.gov (Publication 590)
Example: Contribution Limit
Kevin, age 54, has a Traditional and a Roth IRA at ABC Credit Union. Assuming he is
eligible to contribute to both IRAs, he could contribute $3,000 to his Traditional
IRA and $3,000 to his Roth IRA for tax year 2012.
8
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Individual Contribution Limit
If the account holder’s earned income is lower than the annual contribution limit, the
account holder may be eligible to contribute up to 100 percent of their earned income.
Note: Once again, this is an aggregate total for all of an account holder’s Traditional and Roth IRAs.
Example: Individual Limit
1. Julie, age 19, is a single college student who earned $2,500 working in the university
bookstore for tax year 2012. Even though the IRS contribution limit is $5,000, her
individual limit will be $2,500.
Spousal Contribution Limit
A married account holder who does not earn any (or earns minimal) earned income and
files a joint federal income tax return for a year can treat the couple’s joint earned
income as their own for purposes of determining the annual contribution limit.
To make a spousal contribution, the following requirements must be met.
The couple must file a joint federal income tax return.
There must be enough in earned income to support contributions for either spouse.
Each spouse who wants to make a contribution must have his (or her) own IRA. For a
Traditional IRA, the account holder must be younger than age 70½. For a Roth IRA,
the account holder must meet the MAGI limitations.
Example: Spousal Contribution Limit
Kim and Matt, both 35, are married. Matt is in graduate school and has no earned
income, and Kim is a dentist. As long as Kim and Matt file a joint federal tax return,
Matt can use Kim’s earned income to contribute to his Traditional IRA. If Kim earns at
least $10,000 in 2012, then they can both contribute $5,000 to their own IRAs for
2012.
9
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Apply Your Knowledge: Contribution Limit
1. Edward was born on December 30, 1964. What is his aggregate contribution limit for
2012?
2. Elise was born on April 19, 1962. What is her aggregate contribution limit for 2012?
Contribution Deadline
Ascensus Traditional IRA Contribution Direction
A current-year regular contribution can be made beginning on January 1 of that year.
The deadline to make regular contributions for a year is the deadline for filing that
year’s federal income tax return, generally April 15.
The IRA contribution deadline is not extended for account holders who receive an
extension for filing their federal income tax returns.
If April 15 falls on a Saturday, Sunday, or legal holiday, the deadline is extended to
the next business day.
A regular contribution made by mail is deemed timely if the envelope is postmarked
by the account holder’s federal tax return deadline and is accompanied by written
direction.
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Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Prior-Year Contributions
Ascensus Traditional IRA Contribution Direction
Under federal guidelines, the instruction to attribute a contribution to the prior year
must be in writing and is irrevocable. The account holder may use any written means to
make a prior-year contribution.
To comply with these guidelines, credit unions should adhere to the following
guidelines.
If there is no written instruction, assume the regular contribution is for the current
year.
A prior-year regular contribution cannot be changed to a current-year regular
contribution.
Direct deposit contributions are made for the current-year unless the credit union
receives written instruction before the contribution is made to treat it as a prior-
year contribution.
Apply Your Knowledge: Contribution Deadline
1. What is the last date on which Henry can make a contribution for tax year 2012?
2. If Henry makes his 2012 contribution on February 12, 2013, what methods can he
use to provide the written direction for a prior-year contribution?
11
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
In Review
The purpose of an IRA is to help the account holder save for retirement while gaining
certain tax advantages.
1. The eligibility requirements for Traditional IRA contributions
Earned Income – The account holder must receive earned income during the
year for which the contribution is being made or file a joint federal income tax
return with a spouse who receives earned income.
Age – The account holder must be under age 70½, and must not reach age 70½
during the year for which the contribution is being made.
2. The eligibility requirements for Roth IRA contributions
Earned Income – The Roth account holder must receive earned income during
the year for which the contribution is being made or file a joint federal income
tax return with a spouse who receives earning income.
Income Limit – The Roth account holder must have earned income under the
MAGI limit for the year for which the contribution is being made.
3. An eligible individual who reaches age 50 by the end of the calendar year may make
a “catch-up” contribution for that year.
4. An eligible individual may make contributions up to the lesser of 100 percent of
earned income or the annual contribution limit for the tax year.
5. A married person who files a joint federal income tax return may claim a spouse’s
earned income as their own under the spousal contribution rules.
6. The deadline to contribute to an IRA is the account holder’s federal tax return
deadline (usually April 15).
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Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Answers to Group Exercises
Contribution Eligibility
1. Meredith is single, 35, and works as a doctor. She receives earned income of
$80,000 per year. Can Meredith make a contribution to a Traditional IRA? (Yes)
2. Derek is married, 38, and is a mechanic. He and his wife file a joint federal income
tax return. Their combined earned income is $84,000 per year and they have a
combined MAGI of $90,000 per year. Can Derek contribute to a Roth IRA? (Yes)
3. George is single, 75, and is a maintenance worker. He has earned income of $35,000
per year. Can George contribute to a Traditional IRA? (No)
Establishing an IRA
1. When completing the application the account holder is required to name
beneficiaries. (No)
2. The account holder must sign the application to establish the IRA. (Yes)
3. What five documents must the account holder receive upon the opening of an IRA?
(IRA application, IRA agreement, IRA disclosure statement, financial disclosure,
and Truth-In-Savings).
4. How often must the credit union give the financial disclosure to the account holder?
(Once).
Contribution Limit
1. Edward was born on December 30, 1964. What is his aggregate contribution limit for
2012? ($5,000)
2. Elise was born on April 19, 1962. What is her aggregate contribution limit for 2012?
($6,000)
Contribution Deadline
1. What is the last date on which Henry can make a contribution for tax year 2012?
(April 15, 2013)
2. If Henry makes his 2012 contribution on February 12, 2013, what methods can he
use to provide the written direction for a prior-year contribution? (Every written
direction method accepted by the credit union)
13
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Job Aids
Establishing and Funding IRAs © 2012 Ascensus, Inc. www.ascensus.com
Sources of Income
Earned Income Not Earned Income
Wages
Salaries
Tips
Bonuses
Taxable alimony
Commissions
Professional fees
Jury pay
Directors fees
Combat pay
Interest
Royalties*
Dividends
Rental Income
Unemployment
compensation
Disability pay
Child support
Separation & Early
retirement
AFDC & TANF**
Social Security
*Whether royalties are considered earned income is dependent on several factors.
* *Aid to Families with Dependent Children and Temporary Assistance for Needy Families
2012 MAGI Limits for Regular Roth IRA Contributions*
Filing Status MAGI for
Full Contribution
MAGI for
Partial Contribution
Ineligible for Roth
Contribution
Single Up to $110,000 $110,000 up to $125,000 Over $125,000
Married, filing jointly Up to $173,000 $173,000 up to $183,000 Over $183,000
Married, filing separately** N/A $0 up to $10,000 Over $10,000
** If the Roth account holder did not live with their spouse at any time during the year,
they are considered a single filer for the purpose of determining Roth IRA eligibility.
* MAGI limits may be adjusted annually by the IRS; changes are posted to the IRA Resource Center.
15
Identifying Info Beneficiary Designation Spousal Consent Signatures
Please Print or Type
___ ___ ___ ___ ___CUID (Credit union will complete.)
___ ___ ___ - ___ ___ - ___ ___ ___ ___IRA Owner’s Social Security Number
IRA Owner’s Birth Date (MM/DD/YYYY) - (required for processing)
Account Number
IRA Owner’s Name (First, Initial, Last)
Street Address
Mailing Address if Different From Street Address
City, State, ZIp
Stock #80008 2300-T (Rev. 1/2010)© 2010 Ascensus, Inc., Middleton, WI
I instruct the credit union to invest this IRA in the following investment: ______________________________________________________________________________________
M This is a Simplified Employee pension (SEp) IRA.
DESIGNATION OF BENEFICIARY (Revocable; see next page for complete instructions)
PRIMARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
SECONDARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
TERTIARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
SPOUSAl CONSENTThis section should be reviewed if either the trust or residence of the IRA owner is located in a community or marital property state and the IRA owner is married. Due to the important tax consequences of giving up one’s community property interest, individuals signing this section should consult with a competent tax or legal advisor.
Current Marital StatusM I Am Not Married – I understand that if I become married in the future,
I must complete a new Traditional IRA Beneficiary Designation/Change form (Form 2303T).
M I Am Married – I understand that if I choose to designate a primary beneficiary other than my spouse, my spouse must sign below.
Consent of SpouseI am the spouse of the above-named IRA owner. I acknowledge that I have received a fair and reasonable disclosure of my spouse’s property and financial obligations. Due to the important tax consequences of giving up my interest in this IRA, I have been advised to see a tax professional.
I hereby give the IRA owner any interest I have in the funds or property deposited in this IRA and consent to the beneficiary designation(s) indicated above. I assume full responsibility for any adverse consequences that may result. No tax or legal advice was given to me by the Trustee.
XSignature of Spouse Date (MM/DD/YYYY)
XSignature of Witness Date (MM/DD/YYYY)
IRA OWNER’S SIGNATUREI acknowledge receipt of the “Credit Union Traditional IRA Disclosure Statement,” which includes a financial projection table. I also accept the terms and conditions of the “Credit Union Traditional IRA Trust Agreement.”
XIRA Owner’s Signature Date (MM/DD/YYYY)
ACCEPTANCE OF TRUSTEE(for credit union use only)
The credit union hereby establishes a traditional IRA for the above IRA owner under the terms of the “Credit Union Traditional IRA Trust Agreement.”
Credit Union Name
Credit Union Mailing Address (include street address)
City, State, ZIp
XAuthorized Credit Union Signature Date (MM/DD/YYYY)
M Check here if this is an amendment to an existing IRA.
TRADITIONAl IRA TRUST APPlICATION PACKET(FORM 2300-T)
© 2010 Ascensus, Inc., Middleton, WI
Stock #80013 2303T
(Rev. 1/2010)
TRADITIONAL IRA BENEFICIARY DESIGNATION/CHANGE (FORM 2303T)
Please Print or Type
Credit Union Name
IRA Owner’s Name (First, Initial, Last)
Account Number
I am the beneficiary. (Check this box if you are not the original owner of this account, but instead received it as a beneficiary after the original owner’s death and are now designating your own beneficiaries.)
___________________________________________________________Original IRA Owner’s Name
____ ____ ____ ____ ____ CUID (Credit union will complete.)
____ _____ _____ - _____ _____ - _____ _____ _____ _____ - _____ _____ Social Security Number IRA Suffix
_____ _____ _____ - _____ _____ - _____ _____ _____ _____ - _____ _____ Original IRA Owner’s Social Security Number IRA Suffix
IRA OWNER’S SIGNATURE(This beneficiary designation is not effective unless signed.)
X_____________________________________________________ ________________________________________________________________________________ Original IRA Owner’s/Inherited IRA Owner’s Signature Date (MM/DD/YYYY)
DESIGNATION OF BENEFICIARY (Revocable; see next page for complete instructions)
PRIMARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
SECONDARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
TERTIARY Beneficiary(ies) — % Column MUST total 100%
% Name Mailing Address Relationship Birth Date SS #
(This beneficiary designation overrides all previous designations for this IRA. If you have more than one IRA, you must fill out a separate Beneficiary Designation/Change Form for each IRA.)
SPOUSAL CONSENTThis section should be reviewed if either the trust or residence of the IRA owner or inherited IRA owner is located in a community or marital property state and the IRA owner or inherited IRA owner is married. Due to the important tax consequences of giving up one’s community property interest, individuals signing this section should consult with a competent tax or legal advisor.
Current Marital StatusM I Am Not Married – I understand that if I become married in the future, I must complete a new Traditional IRA Beneficiary Designation/
Change form (Form 2303T).M I Am Married – I understand that if I choose to designate a primary beneficiary other than my spouse, my spouse must sign below.
Consent of SpouseI am the spouse of the above-named IRA owner or inherited IRA owner. I acknowledge that I have received a fair and reasonable disclosure of my spouse’s property and financial obligations. Due to the important tax consequences of giving up my interest in this IRA, I have been advised to see a tax professional.
I hereby give the IRA owner or inherited IRA owner any interest I have in the funds or property deposited in this IRA and consent to the beneficiary designation(s) indicated above. I assume full responsibility for any adverse consequences that may result. No tax or legal advice was given to me by the Trustee or Custodian.
X_____________________________________________________ ________________________________________________________________________________ Signature of Spouse Date (MM/DD/YYYY)
X_____________________________________________________ ________________________________________________________________________________ Signature of Witness Date (MM/DD/YYYY)
Sample
Page 1 of 10
Stock #80008 2300-T (Rev. 1/2010)© 2010 Ascensus, Inc., Middleton, WI
Form 5305 under Section 408(a) of the Internal Revenue Code FORM (rev. March 2002).
The grantor named on the application is establishing a traditional individual retirement account under section 408(a) to provide for his or her retirement and for the support of his or her beneficiaries after death.
The trustee named on the application has given the grantor the disclosure statement required by Regulations section 1.408-6.
The grantor has assigned the trust account the sum indicated on the application.
The grantor and the trustee make the following agreement:
1. CONTRIBUTION LIMIT
Except in the case of a rollover contribution described in section 402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16), an employer contribution to a simplified employee pension plan as described in section 408(k) or a recharacterized contribution described in section 408A(d)(6), the trustee will accept only cash contributions up to $3,000 per year for tax years 2002 through 2004. That contribution limit is increased to $4,000 for tax years 2005 through 2007 and $5,000 for 2008 and thereafter. For individuals who have reached the age of 50 before the close of the tax year, the contribution limit is increased to $3,500 per year for tax years 2002 through 2004, $4,500 for 2005, $5,000 for 2006 and 2007, and $6,000 for 2008 and thereafter. For tax years after 2008, the above limits will be increased to reflect a cost-of-living adjustment, if any.
2. NONFORFEITABLE
The grantor’s interest in the balance in the trust account is nonforfeitable.
3. INVESTMENT LIMITATIONS
3.1 No Life Insurance or Asset Commingling. No part of the trust account funds may be invested in life insurance contracts, nor may the assets of the trust account be commingled with other property except in a common trust fund or a common investment fund (within the meaning of section 408(a)(5)).
3.2 Restriction on Collectibles. No part of the trust account funds may be invested in collectibles (within the meaning of section 408(m)) except as otherwise permitted by section 408(m)(3), which provides an exception for certain gold, silver, and platinum coins, coins issued under the laws of any state, and certain bullion.
4. REQUIRED MINIMUM DISTRIBUTIONS
4.1 Distributions Must Comply With Tax Laws. Notwithstanding any provision of this agreement to the contrary, the distribution of the grantor’s interest in the trust account shall be made in accordance with the following requirements and shall otherwise comply with section 408(a)(6) and the regulations thereunder, the provisions of which are herein incorporated by reference.
4.2 Post 70½ Distributions. The grantor’s entire interest in the trust account must be, or begin to be, distributed not later than the grantor’s required beginning date, April 1 following the calendar year in which the grantor reaches age 70½. By that date, the grantor may elect, in a manner acceptable to the trustee, to have the balance in the trust account distributed in:
(a) A single sum; or
(b) Payments over a period not longer than the life of the grantor or the joint lives of the grantor and his or her designated beneficiary.
4.3 Death Benefits. If the grantor dies before his or her entire interest is distributed to him or her, the remaining interest will be distributed as follows:
(a) If the grantor dies on or after the required beginning date and:
(i) the designated beneficiary is the grantor’s surviving spouse, the remaining interest will be distributed over the surviving spouse’s life expectancy, as determined each year until such spouse’s death, or over the period in paragraph (a)(iii) below if longer. Any interest remaining after the spouse’s death will be distributed over such spouse’s remaining life expectancy as determined in the year of the spouse’s death and reduced by 1 for each subsequent year, or, if distributions are being made over the period in paragraph (a)(iii) below, over such period.
(ii) the designated beneficiary is not the grantor’s surviving spouse, the remaining interest will be distributed over the beneficiary’s remaining life expectancy as determined in the year following the death of the grantor and reduced by 1 for each subsequent year, or over the period in paragraph (a)(iii) below if longer.
(iii) there is no designated beneficiary, the remaining interest will be distributed over the remaining life expectancy of the grantor as determined in the year of the grantor’s death and reduced by 1 for each subsequent year.
(b) If the grantor dies before the required beginning date, the remaining interest will be distributed in accordance with (i) below or, if elected or there is no designated beneficiary, in accordance with (ii) below:
(i) The remaining interest will be distributed in accordance with paragraphs (a)(i) and (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), starting by the end of the calendar year following the year of the grantor’s death. If, however, the designated beneficiary is the grantor’s surviving spouse, then this distribution is not required to begin before the end of the calendar year in which the grantor would have reached age 70½. But, in such case, if the grantor’s surviving spouse dies before distributions are required to begin, then the remaining interest will be distributed in accordance with (a)(ii) above (but not over the period in paragraph (a)(iii), even if longer), over such spouse’s designated beneficiary’s life expectancy, or in accordance with (ii) below if there is no such designated beneficiary.
(ii) The remaining interest will be distributed by the end of the calendar year containing the fifth anniversary of the grantor’s death.
4.4 No Contributions to Inherited IRA. If the grantor dies before his or her entire interest has been distributed and if the designated beneficiary is not the grantor’s surviving spouse, no additional contributions may be accepted in the account.
4.5 Computation of the RMD. The minimum amount that must be distributed each year, beginning with the year containing the grantor’s required beginning date, is known as the “required minimum distribution” (RMD) and is determined as follows:
(a) Post 70½ RMD. The required minimum distribution under paragraph 4.2(b) for any year, beginning with the year the grantor reaches age 70½, is the grantor’s account value at the close of business on December 31 of the preceding year divided by the distribution period in the uniform lifetime table in Regulations section 1.401(a)(9)-9. However, if the grantor’s designated beneficiary is his or her surviving spouse, the required minimum distribution for a year shall not be more than the grantor’s account value at the close of business on December 31 of the preceding year divided by the number in the joint and last survivor table in Regulations section 1.401(a)
CREDIT UNION TRADITIONAL IRA TRUST AGREEMENT (rev. 1/2010)
Sample
Page 4 of 10
Stock #80008 2300-T (Rev. 1/2010)© 2010 Ascensus, Inc., Middleton, WI
This publication discusses traditional individual retirement accounts (IRAs) in general, and your credit union-sponsored traditional IRA in particular. This publication only discusses the federal tax rules, and you should consult your tax advisor concerning the tax laws of your state. Your credit union is referred to as “we” in this document.
There are two types of IRAs. This document primarily discusses the original IRAs that were created in 1974, which are called “traditional IRAs.” The second type was created by Congress in 1997, and these are called “Roth IRAs.” Roth IRAs are discussed in this document only to the extent they relate to traditional IRAs. Many rules are the same for both traditional and Roth IRAs, and the discussion of these rules will refer simply to “IRAs.” For more information about Roth IRAs, ask for the Credit Union Roth IRA Disclosure Statement.
1. CAN I REVOKE MY IRA AFTER I HAVE SIGNED THE APPLICATION?
Right to Revoke. You can revoke an IRA within seven days after you receive this disclosure statement (except that you cannot revoke your IRA if you received this disclosure statement seven or more days before you set up your IRA). We are required to report to the IRS the contributions to and distributions from a revoked IRA.
How to Revoke. You can revoke an IRA by calling us, writing to us, or stopping by our office. Calls should be placed during normal business hours. Mailed notices are timely if postmarked within the seven-day period. If you revoke your IRA, the entire amount of any contributions you have made will be returned to you.
2. HOW MUCH CAN I CONTRIBUTE TO A TRADITIONAL IRA?
There are two limits on the regular contributions you can make to a traditional IRA for a year. Your regular traditional IRA contributions are limited to the lower of these limits. All regular contributions for the same year to all of your traditional IRAs must be combined for purposes of meeting the contribution limits. A regular traditional IRA contribution is any contribution that does not qualify as a direct transfer, rollover, direct rollover, recharacterization, SEP or SIMPLE contribution.
(a) Compensation Limit. In general, your total regular IRA contributions for a year (both to Roth and traditional IRAs) cannot exceed the amount of your compensation earned during that year. If you file a joint federal income tax return and earn less compensation than your spouse, you can treat as compensation the joint compensation of you and your spouse, less the IRA contributions made by your spouse. Your compensation for a year is the total
taxable income you receive during the year for performing services or that you receive as taxable alimony or separate maintenance payments. Amounts excluded from taxable income are generally not treated as compensation. The only exception is that all combat pay earned by military personnel is treated as compensation, even though most combat pay is not taxable. Compensation does not include income from property, such as interest, dividends, rent, or capital gains. You compute your net income from performing services by adding:
• The wages, salary, tips, bonuses, professional fees, consulting fees, and other amounts you receive for providing personal services as an employee (you can use the amounts shown in the “wages, tips, other compensation” box of the IRS Forms W-2 that you receive); plus
• The net income from a business you own and operate as a sole proprietor or your share of partnership income, but only if you actively provide services in connection with the business.
(b) Annual Contribution Limit. Your regular traditional IRA contributions for a year cannot exceed the annual contribution limit (which is the amount stated in the following table). The annual contribution limit is higher in the year you reach age 50 and in each subsequent year. For example, if you reach age 50 by December 31, 2007, then this limit is $5,000 for 2007.
Contributions For Under Age 50 Age 50+ 2006–2007 $4,000 $5,000 2008 $5,000 $6,000
In 2009 and later years, the $5,000 contribution limit for individuals under age 50 will be subject to an inflation adjustment. The annual contribution limit for individuals age 50 or older will be $1,000 more than the adjusted amount for individuals under age 50.
3. WHEN CAN I MAKE CONTRIBUTIONS?
You can make regular IRA contributions up until the time prescribed by law for filing the tax return for the year, not including filing extensions. If you report income on a calendar tax year basis, the deadline for making a regular IRA contribution for a year is April 15 of the following year. If April 15 is a weekend or a legal holiday at the address to which you mail your federal tax return, then the deadline is the next business day. You can make a regular IRA contribution before this deadline even if you have already filed your tax return for the year (this may require you to file an amended return). There is no special time during this period for making a regular IRA contribution. You can make regular IRA contributions periodically during the year, or in a single contribution for the year.
4. HOW MUCH OF MY TRADITIONAL IRA CONTRIBUTION CAN I DEDUCT?
This answer discusses the amount that you can deduct for making regular contributions to a traditional IRA. The amount that you can contribute is discussed in answer 2.
Factors Affecting Deduction. The amount you can deduct depends on whether you and your spouse (if you are married) are active participants in a retirement plan, and your modified adjusted gross income (MAGI) for federal income tax purposes.
An active participant in a retirement plan is someone who is an active participant in an IRC 401 pension, profit-sharing, or stock-bonus plan; a Keogh plan; a SEP plan; a SIMPLE plan; a government retirement plan (other than Social Security); an IRC 403(b) annuity or mutual fund plan; or an employee savings plan operated under IRC 501(c)(18). The following retirement plans are ignored in making this determination: (1) Service as a member of a reserve or national guard unit of less than 91 days of active duty during the year (other than active duty for training), or (2) Service as a volunteer firefighter, if the accrued benefits as of the beginning of the year are not more than an annual benefit of $1,800 (single life annuity commencing at age 65).
Your MAGI is your adjusted gross income before taking any deduction for IRA contributions, and without taking into account certain foreign income, foreign housing exclusions, and series EE bond interest. Use your joint MAGI if you file a joint income tax return.
If You Are NOT an Active Participant. You can deduct all of your regular traditional IRA contributions regardless of your income if you are single or if your spouse is also not an active participant in a retirement plan. But if your spouse is an active participant in a retirement plan, then the maximum amount you can deduct is phased out between $150,000 and $160,000 of MAGI for 2006, and between $156,000 and $166,000 of MAGI for 2007. Use the MAGI on the tax return you file, whether it is a joint or separate return.
If You ARE an Active Participant. The deduction for an active participant who is single is phased out between $50,000 and $60,000 of MAGI for 2006, and between $52,000 and $62,000 of MAGI for 2007. The deduction for an active participant who files a joint return is phased out between $75,000 and $85,000 of joint MAGI for 2006, and between $83,000 and $103,000 of joint MAGI for 2007. The deduction for a married active participant who files a separate return is phased out between zero and $10,000 of joint MAGI. Most of these phase-out ranges will be adjusted for inflation in subsequent years.
CREDIT UNION TRADITIONAL IRA DISCLOSURE STATEMENT (rev. 1/2010)
Sample
© 2009 Ascensus, Inc., Middleton, WI
ABC CREDIT UNION
1,010
1,020
1,030
1,041
1,051
1,062
1,072
1,083
1,094
1,105
1,116
1,127
1,138
1,149
1,161
1,173
1,184
1,196
1,208
1,220
1,232
1,245
1,257
1,270
1,282
1,295
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
1,010
2,030
3,060
4,101
5,152
6,214
7,286
8,369
9,462
10,567
11,683
12,809
13,947
15,097
16,258
17,430
18,615
19,811
21,019
22,239
23,472
24,716
25,973
27,243
28,526
29,821
This page contains projections of the future value of your IRA based on these assumptions: 1. The investment terms and fees described below remain the same throughout the projection period.2. You withdraw the entire IRA at the end of the accumulation period.3. The single contribution column assumes that $1,000 was contributed at the beginning of the year (the 1st year).4. The annual contribution column assumes that $1,000 was contributed at the beginning of each year starting this year (the 1st year).
The three columns below list the projected values at the end of each year. To find the value at the end of a particular year, locate the years in the accumulated periodchart. Then go left to get the single contribution value, right to get the annual contribution value. Use the chart at the right to find the accumulation period until the endof the year you reach age 60, 65, or 70. These are only projections, not guaranteed amounts. The future value of your IRA will depend on many factors.
***FINANCIAL PROJECTIONS***
ACCUMULATED PERIOD CHARTYears Until You Reach
69686766656463626160595857565554535251504948474645444342414039383736353433323130292827262524232221201918
12345678910111213141516171819202122232425262728293031323334353637383940414243444546474849505152
60 65 70AGENOW
1234567891011121314151617181920212223242526272829303132333435363738394041424344454647
123456789101112131415161718192021222324252627282930313233343536373839404142
SINGLECONTRI-BUTIONVALUE
ANNUALCONTRI-BUTIONVALUE
YEARS
WITHDRAWAL PENALTY (DAYS)
ENROLLMENT FEE
ANNUAL FEE
WDL/TERM FEE
DAYS IN YEAR
0
.00
.00
.00
365
NOMINAL EARNINGS RATE 1.0000
CompoundCALCULATION METHOD
QuarterlyCOMPOUNDING FREQUENCY
1.0038EFFECTIVE ANNUAL YIELD
DaysTERM IN
NUMBER OF DAYS 365
SINGLECONTRI-BUTIONVALUE
ANNUALCONTRI-BUTIONVALUE
YEARS 1,308
1,321
1,335
1,348
1,361
1,375
1,389
1,403
1,417
1,431
1,445
1,460
1,474
1,489
1,504
1,519
1,534
1,549
1,565
1,580
1,596
1,612
1,628
1,645
1,661
1,678
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
31,129
32,450
33,785
35,133
36,494
37,869
39,258
40,660
42,077
43,508
44,953
46,412
47,886
49,375
50,879
52,398
53,932
55,481
57,046
58,626
60,223
61,835
63,463
65,108
66,769
68,447
___ ___ ___ ___ ___
___ ___ ___ - ___ ___ - ___ ___ ___ ___ - ___ ___CUID (Credit union will complete.)
Social Security Number IRA Suffix
TRADITIONAL IRA CONTRIBUTION DIRECTION (FORM 2315)
We report all traditional IRA contributions as regular contributions for the current year, unless we are instructed to report a contribution in a different manner. You can use this form to give us this instruction in two situations.
When you make a regular contribution between January 1 and your tax return deadline (usually April 15), you can instruct us to report the contribution as being attributed to the previous year. You can do this by completing the Regular Contribution section. After you give us this instruction, you cannot change back to having us report the contribution as being for the current year. It is not necessary to instruct us to report a regular contribution for the year in which it is made, since we do this automatically if we do not receive a contrary instruction.
You should tell us whenever you make a simplified employee pension (SEP) contribution so we can report it correctly. You can do this by completing the SEP Contribution section. We are required to report a SEP contribution in the year in which it is made, even if it is based on the earnings in a prior year.
You should complete a Traditional IRA Rollover and Transfer Contributions (Form 2314T) to instruct us that a contribution is a direct transfer or rollover from another traditional IRA or a direct rollover or rollover from a traditional qualified retirement plan.
You should complete an IRA Contribution Recharacterization (Form 2319) to instruct us that a contribution is a recharacterization of a contribution originally made to your Roth IRA.
GENERAL INFORMATION
Stock # 80022 2315 (Rev. 12/2009)© 2009 Ascensus, Inc., Middleton, WI
Please Print or Type
Credit Union Name
IRA Owner’s Name (First, Initial, Last)
Account Number
REGULAR CONTRIBUTION
$____________________________________________ _____________________________________________ Amount of Contribution Tax Year to Which Contribution Applies (YYYY)
IRA OWNER’S SIGNATURE
________________________________________________ _____________________________________________ IRA Owner’s Signature Date (MM/DD/YYYY)
For Credit Union Use Only
_____________________________________ ____________________________________________Name of Credit Union Employee Who Took Deposit Date of Deposit (MM/DD/YYYY)
SEP CONTRIBUTION
$____________________________________________ _____________________________________________ Amount of Contribution Calendar Year Contribution was Made (YYYY)
X
Sample