How to receive an extra IRS tax credit for your retirement account

 There are numerous avenues for savvy spenders to explore when looking for a reduced tax burden. One such avenue is the Saver’s Credit, or the Retirement Savings Contribution Credit.

Available to 401(k)s and IRAs, the Saver’s Credit can be worth up to $2,000 for married couples who file a joint tax return. For single filers, the credit can be worth up to $1,000.

So how does it work? Who qualifies and how much will they get?

First, this tax credit is in addition to the tax benefits your retirement plan already receives. Think about it as an incentive to open a tax-free or tax-deferred account.

Eligibility for the credit depends on whether you’re single or married and how much money you make. Since the credit requirements change every year, let’s look at 2013’s numbers as a pretty good indicator for what 2014 requirements will be. You may be eligible if you are:

• Married filing separately or a single taxpayer with income up to $29,500
• Head of household with income up to $44,250
• Married filing jointly with income up to $59,000

Other rules apply for eligibility: you must be at least 18, you must have not been a full-time student the previous year and you can’t be claimed as a dependent on anyone else’s tax return.

Logically, another rule is that you must have contributed to a 401(k) by the end of the previous year in order to receive the credit, and to an IRA by the filing date of the current year (April 15).

To begin filing for the credit, access IRS Form 8880, which is the Credit for Qualified Retirement Savings Contributions. Tax software  (or a tax professional) will do this for you if you file your tax return online or with a tax service.

Keep in mind that the Saver’s Credit is just one benefit of retirement accounts. You can deduct money from certain accounts that you contribute to and the money you contribute to some accounts grows tax-deferred or tax-free. For more information on how to maximize your retirement account, call us at New Direction IRA or visit www.ndira.com.

Refer a friend to open a self-directed IRA account and save!

New Direction IRA, Inc. (NDIRA), an IRA administrative services provider, will give you a $50 credit if you refer a friend to open an account. The new account holder will get a $10 discount on the application fee.

NDIRA is a self-directed IRA provider that lets investors take control of their retirement funds. With an NDIRA account, you can invest your IRA in real estate, precious metals, private equity and more alternative assets.

Most IRA providers will choose your investments for you, or will require you to pick investments that the company has pre-determined. Typically, these investments are limited to publicly traded securities like stocks, bonds and mutual funds. However, an SDIRA puts the power back in your hands by enabling you to invest in what you know and trust.

NDIRA clients keep coming back and referring their friends and family because they are the best in the industry. We have unique technology that makes everything from buying property to collecting rent to exchanging gold assets for silver assets a breeze.

In the last year, NDIRA grew its client base more than 15 percent. That increase is largely because of the NDIRA’s innovation. By listening to investors, financial advisors and industry professionals, NDIRA has developed a service model of great technology and exceptional customer service that meets the unique needs of every partner.

Call us at NDIRA today to get started with alternative asset investing with self-directed IRAs. Whether your goal is to have a real estate IRA, gold IRA, health savings account (HSA) or anything in between, NDIRA can help.

What is a Roth IRA?

Roth IRAs--passed into law in 1997--are a very popular way to save for retirement because investment earnings are tax-free.

With a Roth IRA, cash is contributed "post-tax" which means that the contribution (the amount you delegate out of your salary to put into the account each year) is made with taxable earnings for that year. This cash then buys assets (stocks, real estate, gold, etc.) on a tax advantaged basis. In other words, assets can be bought, sold, or traded within the IRA without incurring capital gains tax and without affecting the IRA holder's personal taxes.

Roth IRA holders may also withdraw the amount they contributed at any time without penalty or tax liability. When you reach 59.5 years of age, you can begin to withdraw from the account (take a distribution) without penalty and without taxes as long as the account has been open for five years. Unlike a Traditional IRA, with a Roth IRA, contributions may be made even after you are 70½, and you are not required to take distributions at any age.

You are allowed to convert any amount of funds from a Traditional IRA to a Roth IRA but it will be taxed. The amount converted in a given tax year is added to your ordinary income for that year.


Given the unique tax benefits, Roth IRAs are a powerful tool to save for retirement to begin with. But you can maximize your Roth IRA further by self-directing your IRA and investing in alternative assets like real estate, precious metals, private equity and more.

Self directed IRAs are becoming popular in their own right and allow you to invest in assets you know and trust. For more information on Roth IRAs or self-directed IRAs, visit www.newdirectionira.com.

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IRA Plan Types Explained!

Saving for retirement is crucial and the IRS has provided several tools to help you do so.

The most common plan type is the Individual Retirement Arrangement or IRA. An IRA is like a bank account that you contribute to but can’t withdraw from until you are 59.5 years of age. As a bonus, the IRS has given IRAs special tax treatment to allow them to grow faster.

There are two types of IRAs: Traditional IRAs and Roth IRAs. With a Traditional IRA, contributions (deposits) are made with pre-tax funds and are normally removed directly from your paycheck. This type of plan is called a tax-deferred plan because taxes are paid when the funds are distributed (withdrawn) at retirement. On the other hand, Roth IRA contributions are made with post-tax funds and since tax has already been paid there is no tax on distributions at retirement.

Complementary to the above Traditional IRA, the IRS offers two employer plans: the SEP IRA and the SIMPLE IRA. These plans increase employee’s contribution limits and allow the employer to contribute to their IRA as well. The SEP IRA is normally found in small companies and lets employees defer an additional $4,000 and allows the employer to contribute up to 25% of the employees salary to the plan. With a SIMPLE IRA, the employee can contribute an additional $10,000 a year and the employer contributes 3% of the employees’ compensation (or matches their contribution, whichever is less.) SIMPLE IRAs are often implemented in small to medium size companies because they are much more affordable than a 401(k) plan.

401(k)s, unlike SEPs and SIMPLEs, have no relation to Traditional IRAs other than that funds from a past employer’s 401(k) plan can be rolled-over into a Traditional IRA. Due to their relatively high cost, 401(k) plans are normally found in large companies however the plan is much more flexible than the other plans.

Unknown to most people, the IRS allows a broader rage of investments than securities. In fact, the IRS code only prohibits two investments: life-insurance and collectibles. This means that real estate, notes, LLCs, private stock, gold bullion, (and much more) are all possible investments in any of the above plans. Although these are all allowed, most administrators don’t offer them because each investment is unique and there is a high time involvement working with the client. To invest in these types of non-traditional investments, you need to move your plan to a self-directed administrator that specializes in this field of investing.

For more information on self-directed plans and non-traditional investments, contact New Direction IRA at 303-546-7930 or visit us at www.NewDirectionIRA.com