IRA, which is the abbreviation for Individual Retirement Account, is one of the retirement plans applicable to a US citizen. Self Directed IRA is one of those retirement plans and it gives tax advantages to the plan holder. The decision on investment, as well as IRA limits, rests with the owner.
Regulations relating to Self Directed IRA and IRA limits are such that you will have to obtain the services of a trustee or a custodian who will hold all the assets enlisted under to Self Directed IRA plan on your behalf. The responsibility of such trustee or custodian shall be to take care of assets and transactions related to such assets under the Self Directed IRA plan. He will also maintain all records on behalf of the client.

The trustee under this plan also has the responsibility of explaining to the owner the legal aspects of the Self Directed IRA like transactions that would be illegal in the eyes of law and rules that regulate all transactions, as well as IRA limits. The trustee shall also perform all sorts of administrative duties and responsibilities for the client.

You cannot assign a specific group of assets to the Self Directed IRA. These groups may be stocks, mutual funs or bonds executed. The clients may however be permitted to invest money in such type of investments that is approved by the IRA. The best part of it is that IRA limits are not applicable in such cases. Since the system allows multiple choices for investments, it considerably improves the original owner's chances of diversifying the IRA portfolio.

Taxation has been a major area of concern for any entrepreneur. There are certain negative aspects of the Self Directed IRA that should be taken into account. If the IRA is used for any personal benefits, then apart from the returns gained on the IRA, other incomes become taxable. Moreover if the IRA owner is less than 59 years and six months of age, he or she may have to pay a penalty of 10% towards early withdrawal. Therefore, even if you decide to set up a Self Directed IRA system in your company, you must have a close look at all these aspects and act accordingly so that there are no problems.

In United States, the Self Directed IRA limits for the year 2006 and 2007 were $4000 for every citizen except those who have crossed the age of 50 years. The limits in this case is $5000. You may also find out where a deductible IRA plan could be adopted by you that would give you substantial tax concessions. However, the deductible plan is more feasible for those customers who have not enrolled under any other retirement plans. Since in tax calculations your adjusted gross income is calculated, if you are also covered under some retirement tax benefit plans then you may not be eligible to enroll under a deductible Self Directed IRA. Also remember that the AGI or Adjusted Gross income in your case cannot be more than $62000 in case of bachelors and $103000 in case of married and family holders. If you are not covered under any plan but your wife or husband is, then also you will be entitled to full tax benefits.