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Roth IRA

Who can contribute?

Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation), with the following MAGI*:

  • Up to $95k for single filers
  • Up to $150k for joint filers

Reduced contributions allowed for higher incomes:

  • Up to $110k for single filers
  • Up to $160k for joint filers

How much can I contribute?

  • $5k for 2008-2010
  • $6k for 2009-2010 for owners age 50 and older

Who can make deductible contributions?

  • No one can deduct contributions.

What are the tax advantages?

  • Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59 1/2, disability, death, or a first time home purchase).
  • Not required to start withdrawals at age 70 1/2.

When can I withdraw without restrictions?

  • Regular contributions can be withdrawn tax-free and penalty-free at any time.
  • After the account has been open five years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59 1/2, disability, death, and a first time home purchase**.

Not intended as tax advice. Please consult a tax professional. *MAGI - Modified Adjusted Gross Income from the federal tax form **Lifetime limit for exemption on first-time home purchase is $10k *** Formerly known as the Education IRA

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