Georgia Self-Directed IRA

Georgia Self-Directed IRA

Georgia Overview

While Georgia is among those states that have an income tax, Georgia can boast one of the more supportive retirement tax environments in the country. There’s a generous exemption for retirement income available to retirees age 62 and older.

However, one recent survey gave Georgia poor marks as a retirement spot because of less-than-stellar access to health care for seniors in much of the state. There’s also a relatively high property crime rate.

If you live in Georgia, you will understand why the Peach State gets its name – the air is perfumed with fresh, ripe peaches in the summer and fall, in much of the state.

The weather is quite hot and humid in the summer, but otherwise generally pleasant. Winters are mild, a blizzard or ice storm is rare.

Georgia also has beautiful beaches and sailing off of the East Coast of the state.

Lots of major employers call Georgia home, including Delta Airlines, Coca Cola and Home Depot.

Georgia boasts some of the finest golf courses in the country, including the World Famous Augusta National in Augusta, Peachtree Golf Club in Atlanta, East Lake Golf Club in Atlanta, Atlanta Athletic Club (Highlands) in John’s Creek, Ocean Forest Golf Club at Sea Island, Sea Island Golf Club (Seaside) on St. Simons Island, Atlanta Country Club in Marietta, Ansley Golf Club (Settindown Creek) in Roswell, Country Club of Georgia (Lakeside) in Alpharetta and Hawks Ridge Golf Club in Ball Ground.

Why a Georgia Self-Directed IRA?

Stocks. Mutual funds. CDs. Bonds.

For years, you have heard that these are the types of investment vehicles through which to secure your retirement. The stock market tends to appreciate over the long haul, after all, and bonds are conservative and low on risk. Mutual funds have popped up in recent decades as one of the most popular investment vehicles as well, closely monitoring certain aspects of the stock market.

What most people do not know is that these are not the only investment types available for retirement.

In fact, if you choose self-direction, you will find that the IRS allows for all sorts of different types of investments in a retirement account. You can invest in gold and precious metals, real estate, private companies, and more. There are a few select limits on the sorts of investments you can make, but the good news is: you often have more legal options than you have limits.

For many people, a Georgia Self-Directed IRA means freedom, opportunity, and self-determination. It means not being satisfied that the “market” is the only market that exists. It doesn’t mean you have to switch away all of your old investments. But if you want to invest in real estate or gold to help ensure a secure retirement, those options are indeed open…

And, like other IRA types, Georgia Self-Directed IRAs come with all sorts of investment protections.

Understand Your Georgia Self-Directed IRA Plan Options

Let’s take a moment to consider the various retirement account types:

  • Traditional Self-Directed IRA: A retirement account in which you can invest pre-tax or after-tax dollars, and in which your investments grow tax-deferred, meaning you will pay taxes on them once you begin withdrawing them. When you start making retirement withdrawals–defined as withdrawals after you turn 59.5 years old–the money is treated as income.
  • Self-Directed Roth IRA: Similar to a Traditional IRA, except you make after-tax dollar contributions so you are paying taxes on the front end. This allows your investments to grow tax-free. After the account has been established for 5 years and after you turn 59.5, your withdrawals are tax and penalty-free.
  • Traditional 401(k): A qualified plan that allows employees to make pre-tax elective deferrals. Business owners who want to self-direct can use these as well and allow employees to self-direct their accounts.
  • Self-Directed SEP IRA: Simplified Employee Pension that allows employers to make contributions to the retirement of their employees. An employer can also contribute to their own retirement with a Self-Directed SEP IRA.
  • Self-Directed SIMPLE IRA: Savings Incentive Match Plan for Employees. A “tax-favored” plan that small businesses and individuals can set up for their employees.
  • Self-Directed Solo 401(k): A 401(k) plan that a self-employed individual can use for retirement that offers high contribution limits.

As noted throughout, these same accounts offer a high degree of self-direction if you want to direct your own accounts.

A Variety of Investments

One of the chief benefits of directing your own retirement account is that you get to choose your investments from a wide range of options:

  • Real estate: Apartment buildings, commercial property, retail space, raw land, etc. If you want to earn an immediate income for your retirement account with your investments, rent can be one of the most powerful ways to ensure that. You can also use leverage in a Georgia Self-Directed Real Estate IRA when using non-recourse loans.
  • Private IRA Lending: You can negotiate the terms, interest rate, and length of the loan, as well as other variables like the monthly payment amounts and whether the loan is secured or unsecured.
  • Private companies: Public stocks are what most people think of as “investments,” but there are also private stocks to consider. There is a lot of opportunity for growth in private company stock, but also plenty of risk to consider.
  • Tax liens: With a high rate of return, these investment types are ideal for self-directing investors with smaller accounts.
  • Precious metals: Gold, silver, platinum, palladium. These metals are famous as a “hedge” against economic downturn, which is why many people turn to them as a way to avoid putting all of their eggs in the stock market basket.
  • Single Member LLC: An investor can create an LLC to be owned by their Georgia Self-Directed IRA, managing it themselves. This gives a significant degree of protection; however, you will likely want to consult with a professional to learn how to do this properly.

What You Can’t Do with a Georgia Self-Directed IRA

As fun as it is to talk about the various options you can have with a self-directed retirement account, it should be noted that there are certain limits, as well. You cannot self-direct a retirement account to invest in life insurance, collectibles like art, gems/jewelry, coins, alcoholic beverages, and tangible personal property. As enticing as it might be to put that wine cellar under a Self-Directed IRA protection, it’s simply prohibited–so look for your protected retirement investments elsewhere.

Who You Cannot Do Business With

A disqualified person is anyone the Self-Directed IRA has decided is not “arm’s length” from the IRA.  Your IRA cannot engage in any transactions with these individuals or you risk the tax-status of your IRA.

A Disqualified Person is:

  • You
  • Your spouse
  • Any of your lineal ascendants or descendants (parents, children, grandchildren, and the spouses of children, grandchildren, etc. – including legally adopted children).
  • Any investment providers or fiduciaries of the IRA.
  • Any entity (a corporation, LLC, trust, etc.) where a disqualified person owns more than 50%.
  • Any entity (like previously listed) where the IRA account holder is an officer, director, a 10% or more shareholder, or a highly compensated employee.

Getting Started with American IRA

Although we have thrown a lot of abbreviations and words at you, you should know that self-directing your retirement is not as complicated as it might sound. The steps are very simple:

  • Open a Georgia Self-Directed IRA with American IRA. Make sure to put thought into the type of account you would like to open; review the options available to you and select the one that makes the most sense for your individual situation.
  • Fund your account. This is where the options can throw people off. Let’s take a look at them quickly:
    • Contribution: Simply putting money into the account throughout the year. This is what a lot of the funding will look like once the account is already opened.
    • Conversion: Withdrawing part or all of the cash/assets from a Traditional IRA and putting them into a Roth IRA is called a conversion. Once the cash/assets are distributed, you have 60 days to put them in the Roth IRA account.
    • Rollover: A tax-free distribution of cash/assets from one account to be put in another retirement account. You are permitted one rollover per year.
    • Transfer: Transferring cash/assets directly from one retirement account to another retirement account. Because you do not take direct possession of the cash/assets, you are allowed unlimited transfers and there is no tax.

How it Works

1.)  Open an American IRA Self-Directed IRA

  • Select the type of account that you would like to open.

2.)  Fund Your Account

  • Move money into your account by transfer, rollover or contribution.

3.)  Select an Investment

  • Find an asset you want your IRA to purchase and submit an Investment Form. American IRA will work with you and your professionals for a smooth closing.

4.)  Review the Instructions

  • Visit the “How it Works” page on our website to review the instructions for the asset you want to purchase and submit the paperwork required for the investment you have chosen.

5.)  Provide Payment Authorization

  • Submit Payment Authorization Forms for expenses that pertain to the asset your IRA has purchased.

6.)  Submit Deposit Coupons

  • Deposit income generated from the asset your IRA purchased by submitting a Deposit Coupon along with the funds.

Financial Considerations for Georgia Self-Directed IRA Owners

The cost of living in Georgia is about average, overall, though home costs are generally on the low side: The median home price in Georgia as of April 2019 is $177,700, which is quite a bit lower than the national average of $219,700.

The cost of living is higher in Atlanta and its wealthier suburbs, and along the coast.

Transportation costs run high, in part because of the steep 7% ad valorum tax on vehicles, which adds a chunk of change to the cost of a car. And you cannot escape it by buying your car out of state: They get you for the tax when you try to register it in Georgia.

State income taxes on Georgia Self-Directed IRA Income

Georgia has an income tax that ranges from 1% up to 6%, with the highest marginal rate applying to income at $7,000 or higher for single filers and $10,000 for married joint filers as of 2019.

There’s a state standard deducting of $4,700 for single filers and $6,000 for joint filers, so income is tax-free below those amounts. You can also claim a personal exemption of $2,700 for single filers and $3,000 for joint filers.

Georgia does not tax Social Security retirement benefits.

Taxpayers who are 62 or older, or permanently and totally disabled regardless of age, may be eligible for a retirement income adjustment on their Georgia tax return. Retirement income includes:

  • Income from pensions and annuities
  • Interest income
  • Dividend income
  • Net income from rental property
  • Capital gains income
  • Income from royalties
  • Up to $4,000 of earned income

There’s a deduction of $65,000 per person age 65 or older on all forms of retirement income. For those age 62-64, the exclusion is up to $35,000. Part-year residents and snowbirds can take a partial, prorated exclusion. More information on the Georgia retirement income tax exclusion is available from the Georgia Department of Revenue.

Georgia sales taxes

Georgia has a 4 percent sale tax throughout the state. Local governments can add up to an additional 4.9 percent, with the highest combined rates of 8.9% effective in DeKalb and Fulton Counties within Atlanta city limits. You can look up any county in Georgia here.

Groceries are generally exempt from state sales taxes but may be subject to taxation at the county level and lower.

Georgia Self-Directed Real Estate IRAs and property taxes.

Georgians pay low property taxes in most areas of the state, though there are a few higher-cost counties. This makes for a generally friendly jurisdiction for those interested in investing in real estate, either directly or via Georgia Self-Directed Real Estate IRAs.

The average effective property tax rate in Georgia is 0.93%. Long County’s effective tax rate is 1.35%, Miller County’s is 1.38%, Mitchell County’s is 1.42% and Sumpter County’s is 1.56%. Taliaferro County’s effective property tax rate is 1.66, which is the highest in the state. But it’s just 0.52% in Gilmer County, so that should give you an idea of the spread.

Georgia Estate and Inheritance Taxes

Georgia does not have an estate or inheritance tax.

Other Georgia Taxes

Vehicles are subject to an ad valorem tax of 7% of the value of the car.

Georgia has a 44.70 cent gas tax and a 53.80 cent tax on diesel fuel.

Additionally, there’s a 37-cent tax per pack of 20 cigarettes.

Georgia also levies a beer tax of 1.01 per gallon – among the highest alcoholic beverage taxes in the country.

Benefits of Retiring in Georgia

If you are interested in seeking retirement in Georgia, or if you simply want to think about it as a long-term option, you might consider a Self-Directed IRA. A Georgia Self-Directed IRA will allow you to handle plenty of different investments under your own control—all while enjoying the tax protections of retirement accounts.

Are you interested in retiring in Georgia? Want to learn more about how to take advantage of all of the retirement capabilities you have? Then it’s time to think about a Self-Directed IRA. Continue browsing this website to learn more about a Georgia Self-Directed IRA or contact us at 828-257-4949 to learn more about how you can secure a retirement for yourself.

About American IRA, LLC

American IRA, LLC is one of the leading third-party administrators for self-directed retirement accounts in the United States.  The custodian New Vision Trust Company is a South Dakota regulated trust company.   Founder and president Jim Hitt has been investing his own personal assets in Self-Directed IRAs, including Self-Directed Real Estate IRAs, for more than 35 years, and has helped thousands of others declare independence from Wall Street investment companies with their high fees and limited investment menus and become successful Self-Directed IRA investors.

American IRA has offices in Asheville and Charlotte, North Carolina, and Atlanta, GA, but we serve investors from all over the United States and even expats who want to realize the benefits of self-directed retirement investing techniques in Georgia Self-Directed IRAs, Self-Directed Roth IRAs, Self-Directed SEP IRAs, Self-Directed SIMPLE IRAs and even Self-Directed CESAs and Self-Directed HSAs.

A Georgia Self-Directed IRA with American IRA, LLC can help you achieve greater diversification by making it easier to invest in alternative asset classes not commonly available from large investment companies. Self-Directed IRAs also allow you to take more direct control of your retirement assets, while minimizing exposure to needlessly high expense ratios, commissions, wrap fees, 12-b-1 fees and AUM fees commonly charged by Wall Street investment companies. Our much more efficient flat-fee, menu-based fee schedule frequently allows investors to save thousands in fees each year – particularly with larger accounts and buy-and-hold investors.

With a Georgia Self-Directed IRA from American IRA, LLC, you can quickly and easily invest in alternative asset classes like direct real estate ownership, tax liens and certificates, mortgage lending, precious metals, and much more.

To get started, click here to open an account, or call American IRA today at 866-7500-IRA(472).