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IRAs

 
 
October 22, 2014
Individual Retirement Accounts
Linn County State Bank offers both Traditional and ROTH IRAs. We will work with you to determine which type of account is best for you and offer services to:
  • Transfer your current IRA to LCSB
  • Open a new account at LCSB
  • Transfer assets from a qualified retirement plan to an IRA
Frequently Asked Questions

 

Traditional IRA

ROTH IRA

What is the maximum annual contribution (2014)?

Lesser of $5,500 ($6,500 if age 50 or older) or 100% of your taxable compensation for the year

Lesser of $5,500 ($6,500 if age 50 or older) or 100% of your taxable compensation for the year

What is the maximum annual contribution to a spousal IRA (for a spouse with little or no earned income) (2014)?

Lesser of $5,500 or 100% of combined earned income ($6,500 if age 50 or older)

Lesser of $5,500 or 100% of combined earned income ($6,500 if age 50 or older)

Is your ability to contribute phased out for higher incomes?

No

Yes (a single person with adjusted gross income <$114,000, a married person filing separately earning <$10,000 or a married person filing jointly earning <$181,000 would not be subject to contribution restrictions)

Is your contribution tax deductible on your federal income tax return?

Yes. Fully deductible if neither you nor your spouse is covered by a retirement plan. Otherwise, your deduction depends on your income and filing status.

No. Contributions to a Roth IRA are never tax deductible.

How are earnings taxed?

Tax deferred

Tax deferred; tax free if you meet therequirements for a qualified distribution

Are distributions included in your taxable income?

Any deductible contributions and earnings you withdraw or that are distributed from your traditional IRA are taxable. Also, if you are under age 59 you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.

Qualified distributions are completely tax free; otherwise, part of the distribution or withdrawal may be taxable. If you are under 59 , you may also have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.

Are you required to take distributions during your life?

Yes, you must start taking distributions by April 1 following the year in which you turn age 70 and by December 31 of later years.

No, distributions are not required if you are the original owner.

Can contributions be made after age 70?

No

Yes

Does a 10% early withdrawal penalty apply to distributions made before age 59?

Yes, on the portion of the distribution allocable to earnings.

Yes, on the portion of the distribution allocable to earnings.

Includable in your taxable estate at death?

Yes

Yes

Do your beneficiaries pay income tax on distributions after your death?

Yes

Yes

October 22, 2014






Questions?
Want more information?
Contact us at (319) 447-2551
or mailbox@linncsb.com
 
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