Ira Contribution Instructions - First Bankers Trust Services (Page 2 of 3) in pdf

ADDITIONAL INFORMATION

Purpose.

The IRA Contribution Instructions for Traditional, Roth, and

allowed three years after the date of receipt to roll over all or part of

SIMPLE IRAs form is used to document an individual retirement account

the qualified distribution without being subject to the one rollover per

(IRA) contribution transaction.

12-month rule or the 60-day requirement. Certain first-time homebuyer

or hardship distributions may be eligible for rollover within a

Additional Documents.

Applicable law or policies of the IRA

prescribed time period. Indicate the reason code as provided by the

custodian/trustee may require additional documentation. For a

reporting instructions for IRS Form 5498 (e.g., DD for repayment of a

recharacterization, the Internal Revenue Service (IRS) requires you to

federally designated disaster distribution).

provide a written notice of recharacterization.

Reason Code.

The reporting instructions for IRS Form 5498 provide a

For Additional Guidance.

It is in your best interest to seek the guidance

code for use with designated IRA contribution types. Enter the code, if

of a tax or legal professional before completing this document. You

applicable, to indicate the reason for the contribution.

should also reference the IRA agreement and disclosure statement and/or

amendments provided by the custodian/trustee. For more information

Recharacterization.

A recharacterization is the method by which an

refer to IRS Publication 590,

Individual Retirement Arrangements (IRAs)

IRA owner can redesignate the type of IRA contribution made for the

IRS Publication 560,

Retirement Plans for Small Business

, IRS Form

year. The deadline to recharacterize a contribution, plus earnings for

5498,

IRA Contribution Information

, your local IRS office, or the IRS's

any tax year, is the IRA owner's tax-filing due date, including

web site at

extensions. The IRS also requires you to provide a written notice of

recharacterization.

Terms.

A general understanding of the following terms may be helpful in

completing your transactions.

Rollover or Direct Rollover from a Designated Roth Account.

you have assets in a designated Roth account, these assets can be

Conversions.

A conversion is a reportable movement of assets from a

rolled over or directly rolled over to a Roth IRA.

traditional IRA or SIMPLE IRA to a Roth IRA.

Rollover or Direct Rollover from an Eligible Retirement Plan.

You

Designated Roth Account.

A designated Roth account is an account

may roll over or directly roll over any eligible assets from an employer

that is part of an IRC Section 401(a) or 403(b) plan that accepts salary

plan to a Roth IRA. The taxable portion of the direct rollover amount

deferrals designated as Roth contributions. Common names for these

is subject to federal income tax.

plans include Roth 401(k) and Roth 403(b) plans.

SIMPLE IRA Contribution.

Employer contributions include

Disaster/Combat Zone Postponed Contribution.

IRA owners serving

employee deferrals, employer matching contributions, and employer

in a combat zone or hazardous duty area, or affected by a federally

nonelective contributions.

declared disaster area, have an additional period after the normal

contribution due date of April 15 to make annual IRA contributions for

Tax Year of First Roth Contribution/Conversion.

Roth IRA owners

a prior year. Indicate the reason code as provided by the reporting

can avoid paying tax on earnings if they do not remove earnings

instructions for IRS Form 5498 (e.g., FD for a postponed contribution

during the five-year period that begins with the tax year the first

due to an extension of the contribution due date because of a federally

contribution was made, regardless of contribution type.

designated disaster).

Spouse as Beneficiary.

A spouse beneficiary may roll over inherited

Eligible Retirement Plan.

Eligible retirement plans include qualified

eligible retirement plan assets. This is not available to a nonspouse

trusts under IRC Section 401(a), annuity plans under IRC Section

beneficiary.

403(a), annuity contracts under IRC Section 403(b), and certain

governmental IRC Section 457(b) plans. Common names for these

SIMPLE IRA Restrictions.

You are not allowed to transfer or roll over

plans include 401(k), profit sharing, pension, money purchase, federal

assets from an eligible retirement plan to a SIMPLE IRA. A rollover or

thrift savings, and tax-sheltered annuity plans.

transfer from a SIMPLE IRA to a traditional IRA, or a conversion of

SIMPLE IRA assets to a Roth IRA, is not allowed within a two-year

Qualified Reservist/Designated Disaster Distribution Repayment.

period that begins on the date of the initial contribution to your SIMPLE

If you are a qualified reservist ordered or called to active duty after

IRA. You may, however, roll over or transfer a SIMPLE IRA to a

September 11, 2001 for more than 179 days (or for an indefinite

SIMPLE IRA within the two-year period.

period), and take an IRA distribution or take certain elective deferrals

from an eligible retirement plan after September 11, 2001, and before

SEP or SIMPLE Employer Contributions.

All SEP or SIMPLE

the end of your active duty, you may make one or more contributions

contributions should be made by the employer sponsoring the SEP plan or

of these assets to your IRA within two years of the end of your active

SIMPLE.

duty.

Traditional and Roth IRA Contributions.

An annual contribution,

Individuals in certain federally declared disaster areas may be given

commonly referred to as a regular contribution, is your contribution for

the opportunity to take qualified distributions (subject to applicable

the tax year, and is based on your and/or your spouse's compensation.

time periods defined by law) in aggregation from IRAs and other

Your designation of the tax year for your contribution is irrevocable. You

eligible retirement plans up to the prescribed limit (e.g., $100,000 for

may direct all or a portion of any tax refund directly to an IRA.

Midwestern Disaster and Hurricane Katrina). An individual may be

IRA Contribution Instructions for Traditional, Roth, and SIMPLE IRAs

IRACMBCONLAZ 1/1/2011

Bankers Systems

Wolters Kluwer Financial Services

1998, 2011

Page 2 of 3

Ira Contribution Instructions - First Bankers Trust Services Page 2

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