IRA, ROTH & SEP
ACCOUNTS
ABA Roth
Tax Savings Calculator |
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Traditional IRA |
Roth IRA |
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QUALIFICATIONS
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Must have earned income and not have reached age 70 1/2 by
the end of the year. |
Must have earned income. There are no age
restrictions. |
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MAXIMUM CONTRIBUTIONS
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Taxable years beginning in 2009 and after - $5,000* |
Taxable years beginning in 2009 and after - $5,000* |
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CATCH-UP (50+ OVER)
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2009 and after - $1,000* |
2009 and after - $1,000* |
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TAX STATUS OF EARNINGS
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Tax-deferred until withdrawal |
Not taxed. Earnings grow tax-free. |
CONTRIBUTIONS RESTRICTIONS (BASED ON ADJUSTED
GROSS INCOME) |
Yes, if active participant in employer retirement plan.
Contribution phase-outs for 2009 tax year: Singles -
$55,000 - $65,000; Married joint - $89,000 - $109,000 |
Contribution phase-outs for 2009 tax year: Singles -
$105,000 - $120,000; Married joint - $166,000 - $176,000 |
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TAX DEDUCTION |
Yes. Contributions up to the limit are fully tax
deductible if you are not an active participant in a
retirement plan. Otherwise phase-out rules apply. |
No. These are after-tax dollars. |
IRS PENALTIES FOR EARLY WITHDRAWAL |
None if:
- Over 59 1/2
- Death or disability
- Qualified medical expense
- Certain health insurance
- Higher education expenses
- 1st time home purchase (up to
$10,000)
- Due to IRS levy
- Periodic payments
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None if made after a 5-year period and:
- Over 59 1/2
- Death or disability
- Qualified medical expense
- Certain health insurance
- Higher education expenses
- 1st time home purchase (up to
$10,000)
- Due to IRS levy
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REQUIRED DISTRIBUTION |
Must begin by April following year participant turns 70 1/2 |
Only after death of participant |
CONTRIBUTIONS AFTER AGE 70 1/2 |
Not allowed |
Allowed |
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* To be adjusted annually for
inflation in $500 increments.
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Simplified Employee Pension - SEP Accounts |
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If your employer chooses to setup SEP
accounts for their employees, then they may select savings
accounts or time deposit accounts. |