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Roth IRAs
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The Roth IRA allows you to invest after tax dollars today, let the investment from tax-deferred and take qualifying withdrawals tax-free. If you do not withdraw any of the earnings for at least five years, and satisfy one of the qualifying events, those tax-deferred earnings become tax-free. |
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How much may I contribute?
Starting in taxable years after December 31, 2001, the amount qualified IRA owners are permitted to contribute annually to their IRAs will be gradually increased to $5,000. Additional catch-up contributions can be made by qualified individuals over age fifty.
If you qualify,you are permitted to annually contribute the following maximum amounts or 100% of your earned compensation and alimony; whichever is less: see chart for maximum contribution limits.
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Am I eligible to make a full contribution?
Refer to the table below to determine if you are eligible to contribute the full amount for your filing status:
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Full Contribution if MAGI is: |
Limited Contribution if MAGI is: |
No Contribution if MAGI is: |
| Single |
$101,000 or Less for 2008
(105,000 for 2009) |
$101,000 to $116,000
for 2008
($105,000 to $120,000 for 2009) |
$116,000 or more
for 2008
($120,000 for 2009) |
| Married, filing Jointly |
$159,000 or less for 2008
($166,000 for 2009) |
$159,000 - $169,000
for 2008
($166,000 o $176,000 for 2009) |
$169,000 or more
for 2008
($176,000 for 2009) |
| Married, filing separately |
$0 or less for 2008 and 2009 |
$0 to $10,000
for 2008 and 2009 |
$10,000 or more
for 2008 and 2009 |
Involvement in an employer sponsored retirement plan such as a 401(k) or pension plan does not affect your ability to contribute to a Roth IRA, provided you meet the above income guidelines.
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Can I convert my traditional IRA to a Roth IRA?
You may, provided you are a Single filer or married couple filing jointly with a modified adjusted gross income that does not exceed $100,000. Any portion of the converted amount attributable to deductible contributions and earnings must be included as taxable income. The entire taxable amount of the conversion must be included as income for the year the conversion is made.
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When can I withdraw from a Roth IRA?
You may withdraw your Roth IRA contributions at any time, without tax and penalty fee. "Qualified distributions" may be withdrawn tax and penalty free. "Non-qualified" distributions may be taxable and subject to an IRS 10% early distribution penalty.
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