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- Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59 1/2, disability, death, or a first time home purchase).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- Regular contributions can be withdrawn tax-free and penalty-free at any time.
- After the account has been open five years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59 1/2, disability, death, and a first time home purchase**.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