Things You'll Need:
- Information about 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. IRS regulations state that a "qualified trustee" must hold your assets.
-
Step 4
Invest only in products that are allowed by the IRS to prevent incurring penalties. This may include stocks, bonds, mutual funds, gold and real estate.
-
Step 5
Limit your contributions to your self-directed IRA to the maximum amount the IRS has specified for that calendar year. Depositing more money than is allowed can lead to penalties at tax time.
-
Step 6
Follow IRS regulations specifying at what age you must start taking disbursements. Most traditional IRAs require that you start drawing from your IRA account at age 70 1/2. Other accounts, such as the Roth IRA, do not have the same requirement, so be sure to ask your IRA trustee what the rules are for your specific account type.
-
Step 7
Stop contributing money to your traditional IRA after age 70 1/2 years old if regulations state that you must. However, you may continue depositing money into a Roth IRA after this age as long as you are still working.
-
Step 8
Consult your IRS custodian if you are unsure about any aspect of your IRA. It is important to understand the possible repercussions before rolling over funds, investing in new products or withdrawing money from your self-directed IRA.
