Airline Employees Can Break Roth IRA Retirement Investment Rules with IRS Form 8935
Lafayette, CO (PRWEB) May 3, 2009 -- Some current and former employees of Delta, United, Northwest and other airlines can bypass the contribution and income limits of a Roth IRA, if they act before the June 22, 2009 deadline. Bill Humphrey, CPA and Vice President of Entrust New Direction IRA, Inc, a self-directed IRA/401(k) administrator, said, "Not that it compares to the retirement plan they should have, but the self-directed Roth IRA allows for tax-free growth into the future, including for descendants, and is a great deal."
Delta, United, Northwest and other pilots and airline employees received IRS Tax Form 8935, which details the benefit payments that can be rolled into a Roth IRA. "The dollar figure on Form 8935 was received as income in a check from the airline - it was paid in exchange for the termination of the retirement plan due to the bankruptcy," Humphrey said. The airline employees most likely already paid tax on that amount when the money was received. Until June 22, 2009, any amount up to the figure listed in Form 8935 can be rolled into a Roth IRA.
Humphrey's company has already answered many questions for ex-airline employees who wanted to open a self-directed Roth IRA. "Our clients open self-directed IRAs," Humphrey said, "which means they can invest in real estate or gold or private companies, as well as stocks and mutual funds." Self-directed IRAs allow the IRA holder, with or without an advisor, to decide what to invest in, when, and how much. Not limited to the stock market, self-directed IRA investors have invested in raw land, condos, gold bullion and even a front-end loader, according to the website newdirectionira.com.
Normally, the yearly contribution to a Roth IRA is limited to approximately $5,000, and then only if income is under approximately $166,000 for a couple. Due to the special circumstances, airline employees can contribute as little as they wish or as much as their Form 8935 indicates, and that amount and they earnings will never be taxed.
There is a potential down side to this opportunity. Airline employees must open the Roth IRA by June 22 and some may not have the money. "Some clients have borrowed, sold other assets, or gotten second mortgages to be able to fund the IRA," Humphrey said. "As long as it's cash, they can start earning tax-free funds from the day they open the self-directed Roth IRA."
For more information, go to http://pilot.newdirectionira.com.
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