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ROTH IRA Contributions to a
Roth IRA are not tax deductible. However, withdrawals from a Roth IRA may be
tax-free.
Married couples
filing a joint tax return with a Modified Adjusted Gross Income (MAGI) up to $150,000.00 and
those filing individualy with a MAGI
up to $95,000.00 can make full contributions to a Roth IRA. Those with higher
incomes may qualify for reduced contributions. Contributions can be made to a
traditional IRA, a Roth IRA, or both for a given year, but the aggregate
contribution may not exceed your annual compensation or $4,000.00 per year, whichever is less.
The contribution limits for married couples are equal to two times the above limits in each plan year. For example, in 2005, a married couple, both of whom are over age 50 may contribute a total of $9,000.00. Withdrawals from a Roth IRA are tax and penalty free as long as the account has
been open for at least five tax years and you are over age 59½,
disabled, or buying a first home. You may withdraw contributions tax and penalty
free at any time, but earnings withdrawals are subject to income tax and may be
subject to a 10% penalty tax |
