Idaho Self-Directed IRA

Idaho Self-Directed IRA

Idaho Overview

Idaho is blessed with a tremendous amount of natural beauty, and the cold winters are more than compensated for the beautiful summers. The cost of living is reasonable throughout the state, and crime rates are among the lowest in the country, even in the “big” cities.

It’s a fantastic state for outdoors enthusiasts, with more than 30 state parks and easy access to Yellowstone National Park. The biggest city, Boise, is known for lots of live music, and there’s a 25-mile Greenbelt for walking and biking, which makes it easier to stay active.

Boise is one of the most walkable big cities in the country, and its very bike and pedestrian-friendly. Though you will probably want your own car once things get cold in the winter.

Medical costs are also lower than average.

Golfers will find great courses at Gozzer Ranch Golf and Lake Club in Harrison, the Golf Club at Black Rock in Coeur d’Alene, Huntsman Springs Golf Club at Driggs, the Circling Raven Golf Club in Worley, the Sun Valley Resort Golf Course (Trail Creek) at Sun Valley, Hillcrest Country Club in Boise, and Blue Lakes Country Club in Twin Falls.

Why an Idaho 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, an Idaho Self-Directed IRA means freedom, opportunity, and self-determination. It means not being satisfied that the “market” is the only market that exists. It does not 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, Idaho Self-Directed IRAs come with all sorts of investment protections.

Understand Your Idaho 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 Idaho 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 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 an Idaho 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 an Idaho 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.

Tax and Financial Considerations for Idaho Self-Directed IRA Owners

Idaho’s cost of living is moderate and can be quite affordable in parts of the state.  The median home price is $217,800, as of April 2019, which is quite close to the national average. Prices in popular resort cities are somewhat higher than in the rest of the state.

Idaho State Income Taxes

Idaho has an income tax with brackets starting at 1.125% and ranging up to 6.925%. That top rate kicks in on a very low level of taxable income: $11,279 for single filers as of 2019, and $22,558 for married couples filing jointly.

Idaho does not tax Social Security income, Canadian Social Security benefits (OAS or CPP) or Railroad Retirement benefits. There’s a retirement benefits tax deduction available to Idaho residents age 65 and older (62 and older for those who are disabled). The deduction is reduced by your Social Security income.

As of 2018, the maximum amount that can be deducted under this provision is $33,456 for single filers and $50,184 for married couples filing jointly.

The following types of income are eligible for the Idaho deduction:

  • Civil Service Employees

Retirement annuities paid by the United States to a retired civil service employee or the un-remarried widow of the employee if the recipient is age 65 or older or disabled and age 62 or older. Annuities paid to a retired federal employee under the Federal Employees Retirement System (FERS) does not qualify for the deduction.

  • Idaho Firemen

Retirement benefits paid by the Public Employee Retirement System of Idaho (PERSI) relating to the Firemen’s Retirement Fund to a retired fireman or the unremarried widow of a retired fireman if the recipient is age 65 or older or disabled and age 62 or older. Benefits paid out of the PERSI Base Plan does not qualify for the deduction.

  • Policemen of an Idaho city

Retirement benefits paid from the policemen’s retirement fund of a city within Idaho to a retired policeman or the unremarried widow of a retired policeman if the recipient is age 65 or older or disabled and age 62 or older. For example, benefits paid out of the city police retirement funds for the cities of Coeur d’Alene, Lewiston, and Pocatello may qualify for the deduction. Similarly, benefits paid by PERSI relating to the old Idaho Falls policemen’s retirement fund may qualify for the deduction. Benefits paid out of the PERSI Base Plan does not qualify for the deduction.

  • Service members

Retirement benefits paid by the United States to a retired member of the U.S. military service or the un-remarried widow of a member if the recipient is age 65 or older or disabled and age 62 or older.

The amount deducted must be reduced by retirement benefits paid under the Federal Social Security Act and the Federal Railroad Retirement Act. See the Individual Income Tax Instructions for the maximum amount that can be deducted for a particular year.

Idaho sales taxes

Idaho imposes a statewide sales tax of 6%, with prescription drugs exempt. A few local governments may add up to three percent more – primarily resort towns and tourist destinations such as Sun Valley and Stanley.

Idaho Self-Directed Real Estate IRAs

Property taxes in Idaho are lower than average, with an effective average property tax rate of just 0.72%. This makes Idaho a reasonably friendly jurisdiction for Idaho Self-Directed Real Estate IRAs, though distributions from IRAs are subject to Idaho’s income tax.

Owner-occupants of homesteads with less than 1 acre of land may be eligible for a “circuit breaker property tax reduction of up to $1,320, if their income does not exceed the state threshold. This holds property taxes down, especially for senior citizens in lower income strata. More information on the circuit breaker deduction is available here.

Idaho Estate and Inheritance Taxes


Other Idaho Taxes

Idaho imposes a gasoline tax of 33 cents per gallon.

Benefits of Retiring in Idaho

If you are interested in seeking retirement in Arizona, or if you simply want to think about it as a long-term option, you might consider a Self-Directed IRA. An Idaho 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 Arizona? 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 an Idaho 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, 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 Idaho Self-Directed IRAs, Self-Directed Roth IRAs, Self-Directed SEP IRAs, Self-Directed SIMPLE IRAs and even Self-Directed CESAs and Self-Directed HSAs.

An Idaho 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 an Idaho 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).

For other easy Idaho Self-Directed IRA solutions, talk to our valued partner TurnKey IRA.