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8850 Form Workforce: What You Should Know

Roth IRA and 401(k) The IRS limits the amount that you can contribute each year to a Roth IRA and to a Roth 401(k). You can make contributions that are in any amount up to 5,500, even though the contribution limit for 2017 is 5,500. As part of your income tax filing that year, you may find yourself asked to complete an IRS form called the Individual 401(k) and Roth IRA Contribution and Identification Worksheet. You can use this form with other income and FICA tax forms to help you figure out how much of your own IRA contributions to this Roth 401(k) contribution you need to make and when you need to make it. The IRS also allows you to use it with income tax and a 3-for-1 matching amount with the first 2,000 your 401(k) earns to help you fill in the gaps. When you have your tax results, contact your employer to find out for certain organizations how you were able to contribute to your Roth IRA in 2017. Many employers provide their own options for contributing through retirement plans and/or the company's 401(k) plan. You must begin making your Roth IRA or Roth 401(k) contribution for the year of your 2017 tax year. You can contribute to your Roth IRA and Roth 401(k) at any time during the tax year. Furthermore, you must pay earnings tax on earnings you earn to your Roth IRA or Roth 401(k), even if you aren't required to pay income tax on them. However, you can pay tax on the earnings you earn only in the year they are earned, which is generally the tax year in which you receive them. If you do not make earnings distributions to a Roth 401(k) in the year in which they are earned, your Roth 401(k) contributions may not be tax-deferred. You can contribute to a Roth IRA or Roth 401(k) at any time for retirement. You may pay a penalty in the year you make a nonrecurring contribution. In most cases, there is an administrative penalty for nonrecurring, nondeductible contributions. In general, a Roth IRA and a Roth 401(k) are two separate accounts in your name. If you receive any money from both, the Internal Revenue Service treats them as a joint account.

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