Wednesday, March 09, 2005

Turbotx & IRA

Roth IRA

• Money you contribute to your IRA is not deductible.

• You can make contributions at any age, as long as you're earning an income below certain limits. You may not make a full contribution to a Roth IRA if your income falls into these ranges:

— Married filing jointly: $150,000 - $160,000
— Married filing separately: $0.00 - $10,000
— Single, head of household, and qualified widow(er)s: $95,000 - $110,000

• Withdrawals are not restricted by age or amount of the withdrawal.

• Qualified withdrawals are not taxed.

Traditional IRA

• You may be able to deduct what you contribute the same year you make the contribution.

• Penalty-free withdrawals are allowed after you are 59.5 years old; if you haven't already, you must start taking distributions when you turn 70.5 years of age.

• Earnings (i.e. interest) aren't taxed until you begin taking withdrawals.

• Non-deductible contributions are not taxed when they are withdrawn.

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