How Do You Follow IRS Regulations For A Self-Directed IRA?
A self-directed IRA is a type of retirement account where you, the account holder, make all the decisions regarding investments. A competent accountant or tax professional may advise you of investment options, but you essentially call the shots. As with all kinds of retirement accounts, it is important to follow Internal Revenue Service (IRS) regulations. Step 1 Be sure you have a job that qualifies as earned income. According to IRS regulations, only individuals who earn an income from offering goods and services can open a self-directed IRA account. Some types of employment, such as earning money by renting out your properties, do not qualify. Step 2 Confirm the IRS regulations for all types of IRA accounts before you choose which account to open. Because of your age or income level, you may qualify for some, but not all, plans. Step 3 Choose an IRA custodian or trustee–the company or bank who is in charge of your self-directed IRA–who is experienced with your type of IRA account.
