How long do I have to make IRA contributions for the current tax year?
You can make deposits to a Traditional or Roth IRA for the previous tax year until the April tax-filing deadline, which is usually April 15.
What's the difference between an IRA transfer and rollover?
With a transfer, the funds are sent directly from your IRA at one institution to your IRA at another. You do not personally take possession of the funds. Transfers are not reported to the Internal Revenue Service since funds are moved directly from one IRA to another.
With a rollover, the funds are given to you to deposit to an IRA. Rollover transactions are reported to the IRS, and you have 60 days to deposit the funds in an IRA and avoid an IRS penalty. Regardless of how many IRAs are owned, only 1 IRA rollover is allowed per taxpayer each year.
Rollovers are used to move eligible funds from a qualified retirement plan (QRP) to a traditional IRA. If you plan to rollover funds from your QRP to an IRA, be sure you carefully review the tax consequences.
What penalties apply for early withdrawals from an IRA?
IRS penalty: If you're under 59-1/2, the IRS will charge a 10% early withdrawal penalty from a Roth or Traditional IRA. For a Traditional account, you will also need to include the withdrawal amount as income when you file your taxes.
Virginia Credit Union penalty: If you're under 59-1/2 and withdrawing prior to your IRA's maturity date OR if you're over 59-1/2 and choose to close your IRA before its maturity date, the credit union will charge an early withdrawal penalty. That penalty is 6 months' loss of dividends on the amount withdrawn.
How can I make additional deposits to my IRA?
It's easy to make deposits by payroll deduction or automatic transfers from your credit union checking or savings account. Any deposits you make through automated means are considered contributions for the tax year in which we receive them. You can also make deposits by mail, at any VACU branch, or by calling QuikLine Phone Banking.
Can I borrow against an IRA?
The tax laws governing IRAs do not permit that, but ask us about other loan options that could help you.