Law Office Of Keith R. Miles, LLCKeith MilesAttorney-at-Law2250 Oak RoadPO Box 430Snellville, GA 30078678-666-0618keithmiles@timetoestateplan.comwww.TimeToEstatePlan.com

Traditional IRAs

July 28, 2015Page 1 of 16, see disclaimer on final page

Traditional IRAs

July 28, 2015

What is it?The basicsA traditional individual retirement account (IRA) is a personal savings plan that offers certain tax benefits to encourage retirementsavings. Contributions to traditional IRAs are either tax deductible (the money goes into the IRA pretax) or nondeductible (you payincome tax on the money that goes into the IRA). Regardless of whether your contributions are tax deductible, amountscontributed to a traditional IRA grow tax deferred inside the IRA.

A traditional IRA is not itself an investment, but a tax-advantaged vehicle in which you can hold some of your investments. Youneed to decide how to invest your IRA dollars based on your own tolerance for risk and investment philosophy. How fast your IRAdollars grow is largely a function of the investments you choose to fund the IRA.

Tip: The term "IRA" can refer either to an individual retirement account or an individual retirement annuity. An individualretirement annuity is an annuity or endowment contract that you purchase from a life insurance company. The contract must notbe transferable, and the premiums must be flexible so that if your compensation changes, your premium payments can alsochange. In general, the same rules that apply to individual retirement accounts also apply to individual retirement annuities.

Caution: This discussion pertains only to traditional IRAs. Roth IRAs are subject to different rules

Caution: Special rules apply if you inherit an IRA.

Caution: Special rules apply to certain distributions to reservists and national guardsmen called to active duty after September11, 2001.

Deductible contributionsWhen you make tax-deductible contributions to a traditional IRA, the money you invest in the IRA is pretax. Tax-deductiblecontributions are pretax because they reduce your taxable income on your federal income tax return. You can contribute up to thelesser of $5,500 or 100 percent of your taxable compensation to a traditional IRA in 2015 (unchanged from 2014). If neither younor your spouse is covered by an employer-sponsored retirement plan (see Questions & Answers, below), your entire contributioncan be tax deductible. If one of you is covered by such a plan, the amount of deductible contribution you can make (if any)depends on your modified adjusted gross income (MAGI) and federal income tax filing status for the year (see Questions &Answers).

Tip: Making deductible contributions to a traditional IRA often makes sense if you expect to be in a lower income tax bracketwhen you retire.

Nondeductible contributionsIf you or your spouse is covered by an employer-sponsored retirement plan, you might not be able to deduct all (or any) of yourtraditional IRA contribution. But you can still contribute up to the annual contribution limit (or your taxable compensation for theyear, if less), even if part or all of your contribution is not deductible (and therefore not pretax). Contributions that you make to atraditional IRA that you cannot deduct on your federal income tax return are referred to as nondeductible contributions.

Example(s): You are a single taxpayer, have an MAGI of $64,000 for 2015, and are covered by an employer-sponsoredretirement plan. Your ability to deduct traditional IRA contributions is therefore limited. You calculate that you can make only a$2,750 deductible IRA contribution. You contribute $5,500 to your traditional IRA, $2,750 of which is considered a deductiblecontribution, and the remaining $2,750 of which is considered a nondeductible contribution.

Tip: If you are eligible to contribute to a Roth IRA there is generally no advantage to making nondeductible contributions to atraditional IRA.

When can it be used?

Page 2 of 16, see disclaimer on final page

July 28, 2015

You must receive taxable compensation during the yearTo contribute to an IRA (traditional or Roth), you must receive taxable compensation during the year. For purposes of IRAcontributions, taxable compensation includes wages, salaries, commissions, self-employment income, and taxable alimony orseparate maintenance. Other taxable income, such as interest earnings, does not qualify as taxable compensation for thispurpose. Your contribution for a given year cannot exceed your taxable compensation for that year.

Tip: Members of the Armed Forces may include nontaxable combat pay as part of their taxable compensation when determininghow much they can contribute to an IRA (their own or a spousal IRA). For service members with only nontaxable combat pay,Roth IRA contributions will generally make more sense than nondeductible contributions to a traditional IRA.

Tip: Differential pay received by service members is considered compensation for IRA contribution purposes. Differential pay isdefined as any payment which: (1) is made by an employer to an individual with respect to any period during which the individualis performing service in the uniformed services while on active duty for a period of more than 30 days; and (2) represents all or aportion of the wages that the individual would have received from the employer if the individual were performing services for theemployer.

Tip: You don't need taxable compensation in order to make rollover contributions to your traditional IRA, or repayments ofqualified reservist distributions.

You must be under age 70½You can no longer make annual contributions to a traditional IRA beginning with the year in which you reach age 70½ or any timethereafter, regardless of whether you have taxable compensation (you can, however, make rollover contributions regardless ofyour age).

If you (and your spouse) are not covered by an employer-sponsored retirement plancontributions are fully deductibleIf neither you nor your spouse is covered by an employer-sponsored retirement plan (e.g., a pension, profit-sharing plan, 401(k)plan), you can deduct the full amount of your traditional IRA contribution on your federal income tax return. If you are covered bysuch a plan, your ability to make deductible IRA contributions depends on your MAGI and federal income tax filing status for theyear. (See Questions & Answers, below.) You are considered covered by an employer-sponsored retirement plan if you werecovered by such a plan for even one day during the year. You are also considered covered by such a plan if you were eligible toparticipate in the plan but chose not to do so.

If you are covered by an employer-sponsored retirement plan, your ability to deductyour contribution depends on your modified adjusted gross income and your filingstatusIf you are covered by an employer-sponsored retirement plan and your MAGI exceeds certain established thresholds, yourdeduction for your traditional IRA contribution is reduced or eliminated as follows:

If your 2015 federal income tax filingstatus is:

Your IRA deduction is reduced if yourMAGI is between:

Your deduction is eliminated if yourMAGI is:

Single or head of household $61,000 - $71,000 $71,000 or more

Married filing jointly or qualifyingwidow(er)

$98,000 - $118,000 (combined) $118,000 or more (combined)

Married filing separately $0 - $10,000 $10,000 or more

See Questions & Answers.

These income ranges are for the 2015 tax year. The income ranges (other than married filing separately) are indexed for inflationeach year.

If you are married, special rules may apply

Page 3 of 16, see disclaimer on final page

July 28, 2015

If you are covered by an employer-sponsored retirement plan, it doesn't matter whether your spouse is covered by such aplan--your ability to deduct your IRA contributions is subject to the income limits described above. If, however, you are not coveredby an employer-sponsored retirement plan but your spouse is covered by such a plan, special rules must be followed to determinethe deductible portion (if any) of your traditional IRA contribution:

1. If you file your federal income tax return as married filing jointly and your combined MAGI in 2015 is $183,000 ($181,000 in2014) or less, you can make a fully deductible contribution to a traditional IRA.

2. If you file as married filing jointly and your combined MAGI in 2015 is between $183,000 and $193,000 ($181,000 and$191,000 in 2014), you can make a partially deductible IRA contribution. See Questions & Answers.

3. If you file as married filing jointly and your combined MAGI in 2015 is $193,000 ($191,000 in 2014) or more, you cannotdeduct any portion of your traditional IRA contribution. See Questions & Answers.

4. If you file your federal income tax return as married filing separately but lived with your spouse at any time during the year,your ability to make deductible IRA contributions is limited. If you file as married filing separately but did not live with yourspouse at any time during the year, you are considered a single taxpayer for purposes of determining the deductible portion(if any) of your IRA contribution.

Tip: If you are married filing a joint return, you may be able to contribute to an IRA for your spouse, even if he or she has little orno taxable compensation.

StrengthsContributions can be made on a pretax basisAssuming you qualify for deductible contributions to a traditional IRA, those contributions are made on a pretax basis. In otherwords, the deductible portion of your IRA contribution reduces your taxable income on your federal income tax return. You don'thave to pay federal income tax on your deductible contribution amounts until you withdraw those amounts from the traditional IRA.

IRA funds grow tax deferredFunds in a traditional IRA, including investment earnings, are not taxed until they are distributed to you. This tax deferral greatlyincreases the growth potential of your IRA. With earnings compounding tax deferred year after year in the IRA, you will generallyend up with a larger balance than if you invested the same amount in a taxable investment at the same rate of return.

IRA investment choices are broad and diverseYou can establish an IRA with a bank, mutual fund company, life insurance company, or stock brokerage firm. You can even havemultiple IRA accounts with more than one institution (though your total contribution to all of your IRAs cannot exceed the annuallimit). Furthermore, you can choose from a wide range of specific investments to fund your IRA. Intense competition for IRAdollars has led to a large number of IRA providers and investment choices.

Caution: All investing involves risk, including the possible loss of principal. Before investing in any mutual fund, carefully considerits investment objectives, risks, fees, and expenses, which are discussed in the prospectus available from the fund. Read theprospectus carefully before investing.

State and federal laws may provide protection from creditorsMany states shield IRAs from creditors. You should check with an attorney to find out how your state treats IRAs. However, whilethe protection given to funds in an IRA is generally greater than that given to non-IRA investments, it is usually significantly lessthan that given to funds held in qualified retirement plans. Federal law provides protection for up to $1,245,475 (as of April 1,2013) (and in some cases more) of your aggregate Roth and traditional IRA assets if you declare bankruptcy. (Amounts rolledover to the IRA from an employer qualified plan or 403(b) plan, plus any earnings on the rollover, aren't subject to this dollar capand are fully protected.) The laws of your particular state may provide additional bankruptcy protection, and may provideprotection from the claims of your creditors in cases outside of bankruptcy.

May increase income-sensitive deductionsAssuming you qualify for deductible IRA contributions, that portion of your contribution reduces your taxable income on yourfederal income tax return. When you reduce your taxable income in this manner, other deductions that are income sensitive (such

Page 4 of 16, see disclaimer on final page

July 28, 2015

as medical expenses that exceed 10 percent of your adjusted gross income) may increase, providing additional tax benefits.

A traditional IRA is relatively simple to maintainUnlike qualified employer-sponsored retirement plans, there are no annual reporting requirements for IRAs or for deductiblecontributions made to IRAs. (There are some record keeping and paperwork requirements associated with nondeductiblecontributions made to a traditional IRA.)

Contributions are discretionaryYou do not have to make a contribution to your IRA for any given year unless you choose to. Within the limits on the amount thatyou can contribute each year, you can exercise complete discretion in deciding how much and when to save.

"Catch-up" contributions are allowed if you're at least 50Individuals age 50 and older may make an additional yearly catch-up contribution of up to $1,000 to a traditional or Roth IRA (overand above the regular contribution limit). The purpose of this provision is to help older individuals increase their savings as theyapproach retirement.

You may qualify for a tax creditCertain low- and middle-income taxpayers can claim a partial, nonrefundable income tax credit for amounts contributed to atraditional or Roth IRA. The maximum annual contribution eligible for the credit is $2,000. The maximum credit is $1,000 ($2,000times 50 percent) per taxpayer, but the actual amount of the credit (if any) depends on your MAGI. Here are the credit rates,based on 2015 MAGI limits (these limits are indexed annually for inflation):

Joint Filers Heads of Household Single Filers Credit Rate Maximum Credit

$0 - $36,500 $0 - $27,375 $0 - $18,250 50% of contribution (upto $2,000)

$1,000

$36,501 - $39,500 $27,376 - $29,625 $18,251 - $19,750 20% $400

$39,501 - $61,000 $29,626 - $45,750 $19,751 - $30,500 10% $200

Over $61,000 Over $45,750 Over $30,500 0% $0

To claim the credit, you must be at least 18 years old and not a full-time student or a dependent on another taxpayer's return. Thecredit is in addition to any income tax deduction you might qualify for with respect to your IRA contribution.

Caution: The amount of any contribution eligible for the credit may be reduced by any taxable distributions you (or your spouse ifyou file a joint return) receive from an IRA or employer-sponsored retirement plan (or any nontaxable distributions from a RothIRA) during the same tax year, during the period for filing your tax return for that year (including extensions), or during the priortwo years.

TradeoffsYour ability to make deductible contributions to an IRA may be reduced oreliminated if you are covered by an employer-sponsored retirement planAs discussed above, if you are covered by an employer-sponsored retirement plan, your ability to make deductible contributions toa traditional IRA depends on your MAGI and tax filing status for the year. For 2015, if your filing status is single or head ofhousehold, your IRA deduction is reduced if your MAGI is above $61,000 and eliminated if your MAGI is $71,000 or more. If yourfiling status is married filing jointly or qualifying widower, your IRA deduction is reduced if your combined MAGI is above $98,000and eliminated if $118,000 or more. If your filing status is married filing separately, you cannot make a deductible contribution ifyour MAGI is $10,000 or more, and even if your MAGI is below $10,000, your ability to make a deductible contribution is limited.These income ranges (other than married filing separately) are indexed for inflation each year.

If your spouse is covered by an employer-sponsored retirement plan but you are

Page 5 of 16, see disclaimer on final page

July 28, 2015

not, special rules applyYou are not considered covered by an employer-sponsored retirement plan merely because your spouse is. However, if yourspouse is covered by such a plan (and you are not) and your combined MAGI on a joint return is more than $183,000, your abilityto make deductible contributions to a traditional IRA in 2015 is limited. If your combined income is $193,000 or more, you cannotmake a deductible contribution in 2015 at all. (These dollar limits are indexed for inflation each year.) If your spouse is covered byan employer-sponsored retirement plan and you file separate returns, your ability to make a deductible contribution is severelylimited. See Questions & Answers, below.

Funds you withdraw from a traditional IRA may be taxable income in the yearreceivedWhen you make deductible contributions to a traditional IRA, the money that you are investing in the IRA is pretax. Once in anIRA, the funds grow tax deferred. However, when you take funds out of the IRA, those deductible contribution amounts will besubject to federal income tax in the year distributed to you. Similarly, any investment earnings will be subject to federal income taxin the year distributed. Only nondeductible contribution amounts will not be taxed when distributed, since those dollars were taxedonce already.

Taxable income is taxed at ordinary income tax rates even if funds representlong-term capital gains or qualifying dividendsLong-term capital gains are generally subject to tax at rates that are lower than ordinary income tax rates. Additionally, qualifyingdividends paid to individual shareholders from domestic corporations (and qualified foreign corporations) are taxable at the lowerlong-term capital gains tax rates as well. Distributions from tax-deferred accounts that represent such long-term capital gains anddividends, however, will not enjoy this tax benefit--they are taxable at ordinary income tax rates.

Distributions made before you reach age 59½ may be subject to a 10 percentpenalty taxAn IRA is a retirement savings vehicle, and the tax law encourages you to use the money in the IRA for that purpose. Although anumber of exceptions exist, a 10 percent premature distribution tax generally applies to the taxable portion of any distribution thatyou take from a traditional IRA before reaching age 59½. This penalty tax is in addition to regular federal income tax.

Your beneficiaries pay income tax on proceeds received after your deathSomeone has to pay the income tax on the assets in your IRA, and if it's not you, it's probably going to be your beneficiaries(unless your beneficiary is a charity). After you die, in addition to any estate tax that might be due, the funds in your traditional IRAwill eventually be subject to federal income tax at your beneficiary's rate (to the extent that those funds include deductiblecontributions and investment earnings). However, because taxable IRA death benefits payable to your beneficiary constitute"income in respect of a decedent," or IRD, your beneficiary may be entitled to an income tax deduction equal to the estate taxesthat are attributable to the IRA.

No contributions can be made upon reaching age 70½Beginning in the year that you reach age 70½, you can no longer make annual contributions to your traditional IRA. This is incontrast to the Roth IRA, which permits annual contributions after age 70½ (as long as you have taxable compensation).

Contributions are limited to the annual maximumYou cannot contribute a total of more than $5,500 to all of your IRAs (traditional and Roth) in 2015 (unchanged from 2014). Oneexception is if you're age 50 or older by the end of the calendar year. In this case, you can contribute up to $6,500 in 2015 (and2014) due to a "catch-up" contribution provision. However, this is still considerably less than the contribution limits for mostemployer-sponsored retirement plans.

For instance, you have two traditional IRAs and a Roth IRA. You can contribute no more than $5,500 overall in 2015. You cancontribute the entire $5,500 to any one of the three IRAs, or you can divide the $5,500 contribution among them in any manneryou choose.

Page 6 of 16, see disclaimer on final page

July 28, 2015

Tip: You may also be able to contribute up to $5,500 to an IRA in 2015 in your spouse's name ($6,500 if your spouse is age 50 orolder) even if he or she has little or no taxable compensation.

Caution: An active reservist or guardsman who receives a qualified reservist distribution can repay all or part of that distribution toan IRA at any time during the two year period beginning on the day after active duty ends. The regular IRA contribution limits don'tapply to these repayments (and the repayments aren't deductible).

Tip: The annual contribution limits don't apply to rollover contributions.

You must begin to take annual minimum withdrawals from your IRA when you reachage 70½You are required to take annual minimum withdrawals (required minimum distributions) from a traditional IRA when you reach age70½ (you can always withdraw more than the required minimum in any year). These withdrawals are calculated based on your lifeexpectancy, and are intended to dispose of all of the money in the IRA over a given period of time. In contrast, Roth IRAs are notsubject to required minimum distribution rules during your lifetime.

How to do itEstablish an IRAWhere you choose to establish your IRA and the specific investments you choose depend on your own personal needs andpreferences. You have a wide variety of choices, and you should carefully consider the matter before making your decision. Howfast your IRA dollars grow is more a function of investment strategy and performance than of tax deferral. Consider whether youwant to establish an IRA with a:

• Bank• Financial institution• Mutual fund company• Stockbroker• Life insurance company

You should also consider the types of investments (e.g., stocks, bonds, mutual funds, CDs, annuities) that will best suit your goalsand risk tolerance. Finally, keep in mind that you can establish multiple IRA accounts with more than one institution.

Caution: All investing involves risk, including the possible loss of principal. Before investing in a mutual fund, carefully considerthe investment objectives, risks, charges, and expenses of the fund. This information can be found in the prospectus, which canbe obtained from the fund. Read it carefully before investing.

Tip: Employers who maintain certain retirement plans (like 401(k), 403(b), or 457(b) plans) can allow employees to make theirregular IRA contribution--traditional or Roth--to a special account set up under their retirement plan. These accounts, called"deemed IRAs," function just like regular IRAs. Advantages include the fact that your retirement assets can be consolidated in oneplace, contributions can be made automatically through payroll deduction, you can take advantage of any special investmentopportunities offered in your employer's plan, and your protection from creditors may be greater than that available in astandalone IRA. The downside is that your investment choices in your employer's plan may be very limited in comparison to theuniverse of investment options available to you in a separate IRA. Also, the distribution options available to you and yourbeneficiaries in a deemed IRA may be more limited than in a standalone IRA. Because of the administrative complexity involved,most employers have so far been reluctant to offer these arrangements. Check with your plan administrator to see if this is anoption for you.

You have until the due date of your federal tax return for the year (usually April 15)to make a contribution for that yearIf you want to make an IRA contribution for the year, you have until the due date of that year's federal income tax return. For mostpeople, this is April 15 of the following year. The period of time you have to make a contribution is not extended by any extensionyou may receive to file your return. So, if you obtain an automatic four-month extension, you may have additional time to file yourreturn, but you don't have any additional time to make an IRA contribution.

Page 7 of 16, see disclaimer on final page

July 28, 2015

Tip: You can direct the IRS to deposit all or part of your federal income tax refund directly to an IRA (subject to the normal rulesgoverning the amount, timing, and deductibility of IRA contributions).

Designate the year for which the contribution is madeIf you contribute to your IRA after December 31, you should tell the IRA trustee or custodian for which year the contribution isbeing made. For instance, if you make a contribution in February 2016 for the 2015 tax year, you should clearly identify thecontribution as being made for 2015. Otherwise, the trustee or custodian may assume that the contribution is for 2016 (the year inwhich it is received) and report it as such. Talk to your IRA trustee or custodian about how you should identify your contribution.

Deduct your contributions on your individual federal income tax returnIf you qualify to make deductible contributions to a traditional IRA, make sure that you calculate the portion of your annualcontribution that is deductible. Then make sure that you deduct that amount on your federal income tax return. You take adeduction on your federal income tax return for the year for which you make the IRA contribution. For instance, if you make a$5,500 deductible IRA contribution in February 2016 for the tax year 2015, you deduct the contribution on your 2015 federalincome tax return.

Tip: You can claim a deduction for IRA contributions before you actually make them. For instance, assume you qualify to make a$5,500 deductible contribution to a traditional IRA for 2015. You can file your 2015 return in February 2016 and claim a $5,500IRA deduction even though you may have not yet actually contributed the money. You can wait until April 15 of 2016 to contributethe $5,500 to your IRA so you can actually use your federal income tax refund to fund your 2015 IRA contribution (assuming youreceive a refund by April 15).

Verify contributions you make to your IRAYour IRA trustee or custodian should send you a Form 5498 (or a similar statement). This form or statement, usually sent by June,will show you all of the contributions made to your IRA for the previous year. Check it carefully, particularly if you made acontribution after the close of the calendar year. If there seems to be a problem, contact your advisor or your IRA trustee orcustodian immediately.

Investment choices appropriate for IRAsRemember that an IRA is not itself an investment, but a tax-advantaged vehicle in which you can hold some of your investments.Choosing specific investments to fund your IRAs is an important decision. Here are some points to keep in mind:

• You need to decide how to invest your IRA dollars based on your own retirement goals, tolerance for risk, investmentphilosophy, and other personal factors

• How fast your IRA dollars grow is largely a function of the investments that you choose, as well as tax deferral• There are specific types of investments that you cannot use to fund your IRAs (such as life insurance), and there are some

choices that usually make more sense as IRA investments than others (e.g., mutual funds, CDs)• If you're unhappy with your IRA investment choices, you can typically move your money to other investments offered by the

same financial institution, or to a different institution• You should consider any fees associated with opening and maintaining your IRA

Caution: The IRS has ruled that the wash sales rules apply if you sell stock or other securities outside of your IRA for a loss, andpurchase substantially identical stock or securities in your IRA (traditional or Roth) within 30 days before or after the sale. Theresult is that you cannot take a deduction for your loss on the sale of the stock or securities. In addition, your basis in your IRA isnot increased by the amount of the disallowed loss.

You should talk to a financial professional about choosing appropriate investments for your IRAs.

Tax considerationsIncome Tax

Deductible contributions reduce your taxable income

Page 8 of 16, see disclaimer on final page

July 28, 2015

Any deductible IRA contributions you make reduce your taxable income on your federal income tax return for the year if thecontribution is made or on or before the tax-filing deadline for that year (usually April 15 of the following year).

Nondeductible contributions are made with after-tax dollars

Unlike deductible contributions, nondeductible contributions to a traditional IRA are made with after-tax dollars and do not reduceyour taxable income for the year. However, your nondeductible contribution amounts will not be subject to federal income taxwhen you eventually withdraw them from the IRA.

IRA investments grow tax deferred

Funds in an IRA grow tax deferred. You do not pay any federal income tax on those funds as long as they remain inside the IRA.

Distributions from a traditional IRA may be included in your taxable income

Distributions from a traditional IRA are subject to federal income tax to the extent that those distributions consist of deductiblecontributions and investment earnings (the portion of a distribution that represents nondeductible contributions is not taxed, asthose dollars were already taxed). Such distributions are taxable at ordinary income tax rates even if they represent long-termcapital gain or dividends that would otherwise qualify for capital gains tax treatment. This is true both as you take distributionsduring your life, and when distributions are made to your beneficiaries after your death.

A 10 percent penalty tax can be assessed on withdrawals you make prior to age 59½

Distributions you take prior to reaching age 59½ are potentially subject to a 10 percent premature distribution tax. This penalty taxis in addition to any regular federal income tax that might apply. There are a number of exceptions to the penalty, however.

Rollovers

In general, a rollover is the movement of funds from one retirement savings vehicle to another--in this case, from one traditionalIRA to another. Rollovers are treated separately from contributions; you are still allowed to make your regular IRA contribution in ayear when you have a rollover transaction. There are no age restrictions regarding rollovers, but there are other specific rules thatmust be followed. For example, a rollover generally must be completed within 60 days of the date the funds are released from thedistributing account. If properly completed, rollovers are not subject to income tax or the premature distribution tax. There are twopossible ways that IRA funds can be rolled over, a 60-day (or indirect) rollover and a trustee to trustee transfer.

Tip: You can roll over funds from a traditional IRA to another traditional IRA or you can rollover funds from a Roth IRA to anotherRoth IRA. Special rules apply to converting or rolling over funds from a traditional IRA to a Roth IRA. See "Converting or rollingover traditional IRAs to Roth IRAs," below. You may also be able to roll over taxable funds from an IRA to an employer-sponsoredretirement plan.

With a 60-day rollover, you actually receive a distribution from your traditional IRA. To complete the rollover transaction, you makea deposit into the IRA that you want to receive the funds. Also, you must deposit the full amount distributed to you within theallowable 60-day period. If you fail to complete the rollover or miss the 60-day deadline, all or part of your distribution will besubject to income tax and possibly the premature distribution tax.

Caution: Under recent IRS guidance, you can make only one tax-free, 60 day, rollover from one IRA to another IRA in anyone-year period no matter how many IRAs (traditional, Roth, SEP, and SIMPLE) you own. This does not apply to direct(trustee-to-trustee) transfers, or Roth IRA conversions. A special transition rule applies for 2015: a tax-free rollover you made in2014 is disregarded when determining whether a 2015 distribution can be rolled over, but only if the 2015 distribution is from anIRA that did not make, or receive, the 2014 rollover.

When you take a distribution from your traditional IRA, your IRA trustee or custodian will generally withhold 10 percent for federalincome tax (and possibly additional amounts for state tax and penalties) unless you instruct them not to. If tax is withheld and youthen wish to roll over the distribution, you have to make up the amount withheld out of your own pocket. Otherwise, the rollover isnot considered complete, and the shortfall is treated as a taxable distribution. The best way to avoid this outcome is to instructyour IRA trustee or custodian not to withhold any tax. Unlike distributions from qualified plans, IRA distributions are not subject toa mandatory withholding requirement.

The second type of rollover transaction occurs directly between the trustee or custodian of your old traditional IRA, and the trusteeor custodian of your new traditional IRA. You never actually receive the funds or have control of them, so a trustee-to-trusteetransfer is not treated as a distribution (and therefore, the issue of tax withholding does not apply). Trustee-to-trustee transfers

Page 9 of 16, see disclaimer on final page

July 28, 2015

avoid the danger of missing the 60-day deadline, and are not subject to the "once per 12 month" limitation.

You may qualify for a tax credit

If you're a low- or middle-income taxpayer, you may qualify for a partial income tax credit for amounts contributed to a traditionalor Roth IRA. See the Strengths section for details.

Qualified health savings account (HSA) funding distribution

If you are covered by a high deductible health plan (HDHP), you may be able to make a nontaxable HSA funding distribution fromyour traditional IRA that would otherwise be included in income. The distribution must be a direct trustee-to-trustee transfer to anHSA. The distribution will be nontaxable to the extent it is not more than the limit on your annual HSA contributions. Generally, youcan make only one nontaxable HSA funding distribution during your lifetime. However, if you change your HDHP coverage fromself-only to family, you may be able to make an additional distribution during the same year. For more information, see IRSPublication 553.

Gift and Estate Tax

When you die, your IRA is included in determining if estate tax is due

Unless you name your spouse as beneficiary (unlimited marital deduction) or a charity as beneficiary (charitable deduction), thefull value of your IRA at the time of your death is added to your other assets to determine if federal gift and estate tax is due. Inaddition, your state may impose a state death tax.

Questions & AnswersWhat is a traditional IRA?A traditional IRA is a personal savings plan that offers certain tax advantages to encourage you to set aside money for yourretirement. Depending on your circumstances, you may be able to deduct all or part of your traditional IRA contributions, therebyreducing your taxable income on your federal income tax return. Funds in a traditional IRA grow tax deferred, meaning that youpay no taxes as long as the funds remain inside the IRA.

Caution: Roth IRAs, under which contributions aren't deductible but qualified distributions are tax free, and education IRAs (nowknown as Coverdell education savings accounts), which are used to pay for higher education expenses, are discussed elsewhere.This discussion pertains specifically to traditional IRAs.

Who can set up a traditional IRA?You can set up a traditional IRA and make contributions if you received taxable compensation during the year and were not age70½ by the end of the year. For purposes of this discussion, taxable compensation includes wages and salaries, commissions,self-employment income, and taxable alimony or separate maintenance. Taxable compensation does not include earnings andprofits from property (such as rental income, interest income, and dividend income), pension or annuity income, deferredcompensation received, or any items that are excluded from income.

Tip: You can also establish a traditional IRA to accept rollover contributions from an employer sponsored retirement plan or fromanother traditional IRA, regardless of your age or the amount of your taxable income.

What is a spousal IRA?If you meet certain conditions, you can set up and contribute to an IRA for your spouse, even if he or she received little or notaxable compensation in the year of the contribution. Such an IRA is referred to as a spousal IRA. To contribute to a spousal IRAfor any year, you must meet five conditions:

1. You must be married at the end of the year2. Your spouse must be under age 70½ at the end of the year3. You must file a joint federal tax return for the year4. You must have taxable compensation for the year

Page 10 of 16, see disclaimer on final page

July 28, 2015

5. Your spouse's taxable compensation for the year (if any) must be less than yours

How much can you contribute to an IRA?You can make contributions to your traditional IRA for each year that you qualify. To qualify to make contributions, you must havereceived taxable compensation during the year. In addition, you must not have reached age 70½ during the year. The most thatyou can contribute to your traditional IRA is the smaller of:

• Your taxable compensation for the year.• $5,500 in 2015 (unchanged from 2014) plus an additional $1,000 each year if age 50 or older.

This is the most that you can contribute whether your contributions are to one IRA or multiple IRAs (traditional and Roth).

Tip: These contribution limits don't apply to rollover contributions or repayment of qualified reservist distributions.

Spousal IRA : If you are married and file a joint federal income tax return, you can contribute up to $5,500 in 2014 and 2015 toyour spouse's IRA, even if your spouse has little or no taxable compensation. This means that the total combined contribution thatcan be made to both spouses' IRAs can be as much as $11,000 in 2014 and 2015, and even more if one or both of you are age50 or older and eligible to make catch-up contributions. Although you cannot make contributions to your own traditional IRAbeginning in the year that you reach age 70½, you can continue to contribute to your spouse's traditional IRA until the year that heor she reaches age 70½ (as long as all requirements are met).

Technical Note: Possible limit on contributions: Your contribution limit must be reduced by any contribution that you make to aSection 501(c)(18) plan--a specific type of pension plan created before June 25, 1959, that is funded entirely by employeecontributions. Consult a tax advisor for more information.

Are your contributions deductible?Unmarried individuals: If you are not covered by an employer-sponsored retirement plan, you can deduct the full amount of yourtraditional IRA contribution. If you are covered by an employer-sponsored retirement plan, your ability to deduct your contributionsdepends on your MAGI for the year. See the table below.

If you are married, different rules apply:

• If you are covered by an employer-sponsored retirement plan, see the table below to determine if your ability to deductcontributions is limited

• If neither you nor your spouse is covered by an employer-sponsored retirement plan, you can deduct the full amount of yourtraditional IRA contribution

• If you are not covered by an employer-sponsored retirement plan but your spouse is, special rules apply

Individuals covered by an employer-sponsored retirement plan:

If your 2015 federal income tax filingstatus is:

Your IRA deduction is reduced if yourMAGI is between:

Your deduction is eliminated if yourMAGI is:

Single or head of household $61,000 - $71,000 $71,000 or more

Married filing jointly or qualifyingwidow(er)

$98,000 - $118,000 $118,000 or more

Married filing separately $0 - $10,000 $10,000 or more

These income ranges are for the 2015 tax year. The income ranges (other than married filing separately) are indexed for inflationeach year.

Tip: If you are married but did not live with your spouse at any time during the year, and you file separate returns, you areconsidered a single taxpayer for purposes of determining the deductible portion of your traditional IRA contribution.

Are you covered by an employer-sponsored retirement plan?An employer-sponsored retirement plan, for purposes of the IRA deduction rules, is any of the following:

Page 11 of 16, see disclaimer on final page

July 28, 2015

• A qualified pension, profit-sharing plan, stock bonus plan, or money purchase pension plan (including Keogh plans)• A 401(k) plan• A union plan (a qualified stock bonus, pension, or profit-sharing plan created by a collective bargaining agreement between

employee representatives and one or more employers)• A qualified annuity plan• A plan established for its employees by the United States, by a state or political subdivision, or by any instrumentality of

these entities (not including Section 457 eligible state deferred compensation plans)• A Section 403(b) plan (a tax-sheltered annuity plan for employees of public schools and certain tax-exempt organizations)• A simplified employee pension (SEP) plan• A savings incentive match plan for employees (a SIMPLE plan)• A 501(c)(18) trust (a certain type of tax-exempt trust created before June 25, 1959, that is funded only by employee

contributions), if you made deductible contributions during the year

If you are not sure if you are covered by an employer-sponsored retirement plan:

• Check your Form W-2. If you are covered by such a plan, your Form W-2 for the year should have the "Retirement plan" boxchecked.

• Ask your employer.

You are generally considered to be covered by a defined contribution plan (e.g., profit-sharing plan, stock bonus plan, moneypurchase pension plan) if amounts are contributed or allocated to your account (even if you haven't yet vested in thosecontributions). You are generally considered to be covered by a defined benefit plan if you're eligible to participate in the plan,even if you choose not to do so, and even if you haven't accrued a benefit. You are not considered covered by anemployer-sponsored retirement plan simply because your spouse is covered by such a plan. However, if your spouse is coveredby such a plan and you are not, special rules apply.

Other special rules:

• Member of a reserve unit of the armed forces: If you are a member of a reserve unit of the armed forces, you are notconsidered covered by an employer-sponsored plan if the plan was established by a government agency (the United States,a state, a political subdivision or instrumentality), and you do not serve on active duty (not counting training) for more than 90days during the year.

• Volunteer firefighter: If the only reason that you are covered by an employer-sponsored retirement plan is because you are avolunteer firefighter, you will not be considered covered if the plan was established by a government agency, and youraccrued retirement benefits will not provide more than $1,800 per year upon retirement.

If you are covered by an employer-sponsored retirement plan, how do you calculatethe amount of your deductible IRA contribution (if any)?You must first calculate your MAGI. Your MAGI is the amount of AGI shown on page 1 of your Form 1040 or 1040A, withouttaking into account any:

• IRA deduction• Foreign-earned income exclusion• Foreign housing exclusion or deduction• Exclusion of Series EE bond (may also be called Patriot bond) interest shown on Form 8815• Exclusions of employer-provided adoption assistance• Student loan interest deduction

Next, check your MAGI against the income phase out ranges based on your filing status. See the chart above in "Are yourcontributions deductible?"

If your IRA deduction is reduced and not completely eliminated, you must calculate the portion of your IRA contribution that isdeductible. A worksheet is available to help you make this calculation. See IRS Publication 590, Individual RetirementArrangements (IRAs).

What if your spouse is covered by an employer-sponsored retirement plan, but you

Page 12 of 16, see disclaimer on final page

July 28, 2015

are not?It depends upon your filing status:

Married filing separately: If you file your federal income tax return as married filing separately and your spouse is covered by anemployer-sponsored retirement plan, your traditional IRA deduction is reduced if your MAGI is between $0 and $10,000, andeliminated if $10,000 or more.

Tip: If you are married but did not live with your spouse at any time during the year, and you file separate returns, you areconsidered a single taxpayer for purposes of determining the deductible portion of your traditional IRA contribution.

Married filing jointly: You are not considered covered by an employer-sponsored retirement plan simply because your spouse iscovered by such a plan. However, if you are not covered by an employer-sponsored retirement plan, but your spouse is, yourtraditional IRA deduction for 2015 is reduced if the combined MAGI of you and your spouse on a joint return is between $183,000and $193,000, and eliminated if $193,000 or more.

Example(s): William is covered by an employer-sponsored retirement plan, but William's spouse, Harriet, is not. The combinedMAGI of William and Harriet for the year is $200,000. Neither William nor Harriet can make deductible IRA contributions for theyear.

Example(s): Compare: William is covered by an employer-sponsored retirement plan, but William's spouse, Harriet, is not. Thecombined MAGI of William and Harriet for the year is $125,000. Harriet can make a fully deductible IRA contribution (since theircombined MAGI is less than $183,000, and Harriet herself is not covered by an employer-sponsored retirement plan). In contrast,William (who is covered by an employer-sponsored retirement plan) cannot make a deductible contribution.

If you and your spouse's combined MAGI for the year is between $183,000 and $193,000, calculate your 2015 maximumdeductible contribution by subtracting your combined MAGI from $193,000 and multiplying the result by 0.55 (0.65 if age 50 orolder). Round the result to the next highest multiple of $10.

Example(s): You are not covered by an employer-sponsored retirement plan but your spouse is. Your combined MAGI for theyear is $187,000. The maximum amount that you can deduct as an IRA contribution for the year is $3,300. This amount iscalculated by subtracting your combined MAGI ($187,000) from $193,000 and multiplying the result by 0.55 ($6,000 x 0.55 =$3,300).

What is the limit on nondeductible contributions to a traditional IRA?The difference between the maximum amount you can contribute to a traditional IRA for a given year and the amount of yourdeductible contributions for that year is the amount that you can make as a nondeductible contribution.

Example(s): You are single and covered by an employer-sponsored retirement plan. Your MAGI for 2015 is $66,000. You cancontribute up to $5,500 to your traditional IRA for 2015. However, the largest deductible contribution that you can make is $2,750.If you contribute $5,500 to your traditional IRA, $2,750 will be deductible, and the remaining $2,750 will be nondeductible.

If you want to, you can also designate a deductible contribution to a traditional IRA as a nondeductible contribution by reportingthe contribution as nondeductible on your federal income tax return.

Tip: If you are eligible to contribute to a Roth IRA there is generally no advantage to making nondeductible contributions to atraditional IRA.

Caution: Repayments of qualified reservist distributions are not deductible.

Do you have to report nondeductible contributions?Yes. For any year that you make a nondeductible contribution to a traditional IRA, you must file IRS Form 8606 with your federalincome tax return. You must report nondeductible contributions on Form 8606 even if you do not have to file a federal tax returnfor the year. You must also file Form 8606 for any year that you take a distribution from your traditional IRA if you have ever madenondeductible contributions.

Caution: If you do not report nondeductible contributions, all of your traditional IRA contributions will be treated as deductible.This means that when you make withdrawals, all of the money you withdraw from the IRA will be taxable unless you can prove tothe IRS's satisfaction that nondeductible contributions were made. A penalty can be charged if you do not file Form 8606 when

Page 13 of 16, see disclaimer on final page

July 28, 2015

required, or if you overstate the amount of your nondeductible contributions on Form 8606.

If you make nondeductible contributions to a traditional IRA, does this affectdistributions you take from the IRA?Yes. If you make nondeductible contributions to a traditional IRA, you have a cost basis in the IRA. Nondeductible contributionsare not subject to federal income tax when they are distributed to you, because you already paid tax on those dollars and they areconsidered a return of your investment in the IRA. Once you have made a nondeductible contribution, withdrawals from the IRAare considered made partly from your nondeductible contributions and partly from deductible contributions and investmentearnings. You should consult your tax advisor with regard to this situation.

How do you calculate the taxable and nontaxable portions of a distribution if youmake nondeductible contributions?If you make nondeductible contributions to a traditional IRA, you calculate and report the taxable and nontaxable portions of adistribution using IRS Form 8606. Basically, Form 8606 calculates the ratio of your nondeductible contributions to your total IRAbalance, and applies that ratio to any distribution made. For instance, if 50 percent of your IRA balance represents nondeductiblecontributions, half of your distribution would be subject to federal income tax, but the half representing nondeductible contributionswould not be. All of your traditional IRAs are aggregated for this purpose.

What acts will result in penalties, and what if you contribute too much to an IRA(excess contributions)?Prohibited transactions: Improper use of an IRA by you, your beneficiary, your fiduciary, or members of your family will result inloss of beneficial tax status. Improper use includes:

• Borrowing money from the IRA (although you can in effect withdraw money from your IRA and pay it back within 60 dayswithout tax or penalty by taking advantage of IRA rollover rules)

• Selling property to the IRA• Receiving unreasonable compensation for managing the IRA• Using the IRA as security for a loan• Buying property for personal use with IRA funds (you can always withdraw money from your IRA to purchase property for

personal use--the problem arises when you try to invest your IRA funds in such property)

Investment in collectibles: If your IRA invests in collectibles, the amount invested is considered distributed to you in the yearinvested. In addition to federal income tax, you may have to pay the 10 percent tax on premature distributions. Collectibles includeartwork, rugs, antiques, metals, gems, stamps, coins, alcoholic beverages, and certain other tangible personal property.

Caution: There is an exception. Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins orone-ounce silver coins minted by the U.S. Treasury Department.

Tip: You can also invest your IRA assets in certain platinum coins and in gold, silver, platinum, or palladium bullion of a minimumfineness. The bullion must, however, be in the physical possession of the IRA trustee or custodian.

Excess contributions: If you contribute more than you are allowed to for any year and do not withdraw this overcontribution (andany earnings attributable to the overcontribution) by the due date of your federal income tax return for that year (includingextensions), you are subject to a 6 percent tax. The 6 percent tax, calculated on Form 5329, is assessed on the amount of excesscontributions remaining in your IRA at the end of the tax year.

Example(s): Thirty-year-old Paul Jones is single, has compensation of $32,000, and contributed $6,000 to his IRA for 2015. Paulmade an excess contribution to his IRA of $500 ($6,000 minus the $5,500 limit). The contribution earns $5 interest in 2015 and $6interest in 2016 before the due date of the return, including extensions. He does not withdraw the $500 or the interest it earned bythe due date of his return, including extensions. Paul figures his excess contribution tax for 2015 by multiplying the excesscontribution ($500) (or, if smaller, the total value of his traditional IRAs on December 31, 2015) by.06, giving him an additionalincome tax liability of $30. He enters the tax on Form 5329 and on Form 1040.

Early withdrawals: Unless an exception applies, withdrawals taken prior to age 59½ are subject to a 10 percent prematuredistribution tax on the taxable portion of the withdrawal.

Page 14 of 16, see disclaimer on final page

July 28, 2015

Required distributions after age 70½: After you reach age 70½, you must begin to take annual required minimum distributionsfrom your traditional IRA. A 50 percent excise tax is assessed on amounts that you are required to distribute but do not.

Can you recognize a loss on traditional IRA investments?If you have a loss on your traditional IRA investment, you can recognize (include) the loss on your federal income tax return, butonly when all the amounts in all of your traditional IRA accounts have been distributed to you, and the total distributions are lessthan your unrecovered basis, if any. Your basis is the total amount of your nondeductible contributions to your traditional IRAs.You claim the loss as a miscellaneous itemized deduction, subject to the 2 percent-of-adjusted-gross-income limit that applies tocertain miscellaneous itemized deductions on Schedule A, Form 1040.

Example(s): Bill has made nondeductible contributions to a traditional IRA totaling $2,000, giving him a basis at the end of 2015of $2,000. By the end of 2016, his IRA earns $400 in interest income. In that year, Bill receives a distribution of $600 ($500 basisplus $100 interest), reducing the value of his IRA to $1,800 ($2,000 plus $400 minus $600) at year's end. Bill figures the taxablepart of the distribution and his remaining basis ($1,500) on Form 8606. In 2017, Bill's IRA has a loss of $500. At the end of thatyear, Bill's IRA balance is $1,300 ($1,800 minus $500), and Bill withdraws the entire amount. Bill does not have any othertraditional IRAs. He can claim a loss for 2017 of $200 (the $1,500 basis minus the $1,300 distribution of the IRA balance).

Page 15 of 16, see disclaimer on final page

Law Office Of Keith R. Miles, LLCKeith Miles

Attorney-at-Law2250 Oak Road

PO Box 430Snellville, GA 30078

678-666-0618keithmiles@timetoestateplan.com

www.TimeToEstatePlan.com

July 28, 2015Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2015

IMPORTANT DISCLOSURES

This material is not provide designed to provide specific investment, tax, or legal advice. Theinformation presented here is not specific to any individual's personal circumstances.

To the extent that this material concerns tax matters, it is not intended or written to be used, andcannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.Each taxpayer should seek independent advice from a tax professional based on his or herindividual circumstances.

These materials are provided for general information and educational purposes based upon publiclyavailable information from sources believed to be reliable—we cannot assure the accuracy orcompleteness of these materials. The information in these materials may change at any time andwithout notice.

Page 16 of 16