No, there are no limits on income in determining if designated Roth contributions can be made. Of course, you have to have salary from which to make any 401(k) or 403(b) deferrals. The employer can make matching contributions on designated Roth contributions. However, only an employee's designated Roth contributions can be allocated to designated Roth accounts.

No, in order to provide for designated Roth contributions, a 401(k) or 403(b) plan must also offer pre-tax elective contributions. Yes, a plan that provides for a cash or deferred election can stipulate that contributions will be made in the absence of an affirmative election by you declining participation.

Yes, you can make contributions to both a designated Roth account and a traditional, pre-tax account in the same year in any proportion you choose. However, the combined amount contributed in any one year is limited by the 402(g) limit - $15,000 for 2006 ($15,500 in 2007 plus an additional $5,000 in catch-up contributions if age 50 or older).

The plan administrator or other responsible party with respect to a plan with a designated Roth account is responsible for keeping track of the 5-taxable-year period for each employee and the amount of designated Roth contributions made on behalf of such employee. In addition, the plan administrator or other responsible party of a plan directly rolling over a distribution would be required to provide the plan administrator of the recipient plan (i.e.

No, designated Roth contributions are treated the same as pre-tax elective contributions when performing annual nondiscrimination testing. Yes, a plan can provide that the highly compensated employee (HCE), as defined in section 414(q), with elective contributions for a year that include both pre-tax elective contributions and designated Roth contributions may elect whether excess contributions are to be attributed to pre-tax elective contributions or designated Roth contributions.

A designated Roth contribution is an elective deferral to a section 401(k) or 403(b) plan that has been designated irrevocably by an employee as not excludable from the employee's gross income and to be deposited into a designated Roth account under the plan.

A designated Roth account is a separate account under a section 401(k) plan or section 403(b) plan to which designated Roth contributions are made, and for which separate accounting of contributions, gains, and losses is maintained. This separate accounting requirement applies at the time the designated Roth contribution is contributed to the plan and must continue to apply until the designated Roth account is completely distributed.

Roth contributions are elective deferrals made on an after tax basis within a 401(k) plan. Since these contributions are elective deferrals, they are subject to the 402(g) limit the same as elective deferrals made on a pre-tax basis. If certain withdrawal restrictions are met, the contribution basis and associated earnings are not subject to income taxation at the time of distribution.

No. You can convert several IRAs – SEP, Simple IRA, regular IRA or Rollover IRA– to a Roth IRA as long as your modified adjusted gross income is below $100,000

Withdrawals-if they qualify-are completely exempt from income tax, unlike all other retirement plans. Many can quickly build up their Roth IRA accounts by converting traditional IRAs into Roth IRAs-at a tax cost. Since you need not withdraw from your Roth IRA at any age, more can be passed on to heirs than would be allowed under other plans.

To build a sizable Roth IRA fund, you must convert a traditional IRA (or, after 2007, funds form an employer plan). Conversions are taxable. In converting to a Roth IRA, you risk an excess contribution penalty and an early withdrawal penalty, if income exceeds $100,000.

If you want to convert your Traditional, SEP and/or SIMPLE IRA to a Roth IRA and are required to take the RMD from your non-Roth IRA, the RMD must be removed before the conversion can occur. The RMD cannot be converted and cannot be left in the Traditional IRA at the time of conversion. The first amounts removed from the Traditional IRA represent the RMD.

Yes, as long as the total amount of your contributions does not exceed the maximum annual contribution. For example, in 2005, if you were eligible to contribute $2,000 to a deductible IRA, you could also contribute $2,000 to a non-deductible IRA or Roth IRA.

Contributions for a year must be deposited by the due date (including extensions) for filing your Federal income tax return for the year. The most that may be deducted on the business's tax return for contributions to its employees' SEP-IRAs is the lesser of its contributions or 25% of compensation. (Compensation considered for each employee is limited to $225,000 in 2007, $230,000 for 2008 and subject to annual cost-of-living adjustments for later years.

With a Traditional IRA, the contributions you make are typically deductible for the year the investment is made and taxable when the funds are withdrawn from the IRA. With a Roth IRA, the contributions are not deductible for the year the investment is made but when you take a "qualified distribution" the distribution is taken tax free.

A Roth IRA conversion can be done at any time before the end of the year. Do not confuse the Roth IRA April 15 of the following year contribution deadline with the December 31 Roth IRA conversion deadline. No. Because SEP and SIMPLE IRAs are already IRAs, you can convert them directly to a Roth IRA. However, for a Simple IRA, you must hold your Simple IRA account for at least 2 years before converting it to a Roth IRA.

Yes, the combined amount contributed to all designated Roth accounts and traditional, pre-tax accounts in any one year for any individual is limited by the 402(g) limit - $15,000 for 2006 ($15,500 in 2007 plus an additional $5,000 in catch-up contributions if age 50 or older). The rules regarding frequency of elections apply in the same manner to both pre-tax elective contributions and designated Roth contributions and must be specified under the plan.

No amounts other than designated Roth contributions and rollover contributions (and earnings on such contributions) are permitted to be allocated to a designated Roth account. Therefore, forfeitures, matching or any other employer contributions may not be allocated to the designated Roth account. No, the election to make designated Roth contributions is irrevocable. Once they are designated as Roth contributions, they cannot later be changed to pre-tax elective contributions.

A qualified distribution is generally a distribution that is made after a 5-taxable-year period of participation and that either: In the case of distribution to an alternate payee or beneficiary, the age, death or disability of the employee is used to determine whether the distribution is qualified.

You must make the salary reduction contributions to the SIMPLE-IRA as soon as possible but no later than 30 days after the end of the month in which the amounts would otherwise have been payable to the employee in cash. For example, if your employees would have otherwise received compensation (instead of the elective deferrals) in March, you must deposit the deferral amounts as soon as possible but no later than April 30 th.

No. SEP contributions can be made to Traditional IRAs only. While it is possible to convert a Traditional IRA containing SEP contributions to a Roth IRA, subsequent SEP contributions must be made to a Traditional IRA.

If you are single and have compensation from employment or earned income from self-employment and your modified adjusted gross income (MAGI) is less than $95,000, you can make the maximum annual contribution, regardless of your age; if your MAGI is more than $95,000 but less than $110,000, you can make a partial contribution.

Roth 401(k) contributions are added to regular (tax deferred) 401(k) contributions in calculating the maximum that can be contributed to a plan. The maximum contribution (both Roth 401(k) AND regular 401(k) contributions) for 2007 is $15,500 plus up to an additional $5,000 if the participant attains age 50 during the plan year.

Roth 401(k) contributions are treated the same as regular 401(k) contributions for purposes of a regular or safe harbor match.

No, but the employee participant may convert the SEP IRA into a Roth and pay the tax due on the conversion.

Yes. A small business owner who elects to open an Individual 401(k) plan may also contribute the maximum dollar amount allowable under current law to an IRA or Roth IRA. However, contributions may not be deductible.

Designated funds contain funds which the University has decided to use for a specific purpose. There are two sources: general funds that have been transferred to a department for a specific purpose (ex. departmental research support) and income that has been generated by a department and designated by the Board of Trustees for departmental use. (ex. professional fees, conferences).

quot;Premium pass through" payments are not considered income, and you can not deduct them on your income tax return. Starting in 2007, many Federal employees who are enrolled in HDHPs are eligible to make pre-tax allotments to their HSAs through The Federal Flexible Benefits Plan (FEDFLEX). For more information select this link.