You know the stats: 10,000 boomers reach retirement age each and every day. It's the topic that's on everyone's mind, it seems, and tax season can raise additional questions.

How are earnings on an IRA taxed? What is the penalty for making excessive contributions to an IRA? How are amounts distributed from a traditional IRA taxed? If your clients come to you with these and other questions, we have the answers. 

1. When are funds in an IRA taxed?

Funds accumulated in a traditional IRA generally are not taxable until they actually are distributed. Funds accumulated in a Roth IRA may or may not be taxable on actual distribution. Special rules may treat funds accumulated in an IRA as a "deemed distribution" and, thus, includable in income.

Continue Reading for Free

Register and gain access to:

  • Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.