ROTH IRA LLC Contribution Facts

  • Contributions can be made if you have earned income
  • You contribute already taxed funds (after-tax funds) to a Roth IRA
  • You cannot take a tax deduction for your Roth IRA contribution like you can for a Traditional IRA
  • You can make Roth IRA contributions both before and after age 72.
  • Qualified withdrawals are income-tax free (a withdrawal made after any Roth account has been established for 5 years and the Roth owner is over the age of 59 ½ or qualifies for the first-time home buyer exception or the distribution is due to the account owner’s death or disability)
  • You can also have and contribute to a spousal Roth IRA, based on your income even if your spouse has no earned income
  • Withdrawals of converted amounts may be subject to the 10 percent early distribution penalty if the 5-year exclusion period has not been met (this is a separate 5-year period from the one noted above) and the Roth owner is under age 59 ½ at the time of the withdrawal
  • Roth IRAs are exempt from Required minimum distributions for owners only
  • The SECURE Act changed the distribution rules for Roth IRAs inherited by non-spouse beneficiaries starting in 2020. Other than those non-spouse beneficiaries who are disabled or chronically ill, most beneficiaries will be required to empty out the inherited Roth IRA within 10 years (known as the 10 year rule).
  • All contributions and distributions must flow through the Roth IRA not the LLC.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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