Roth IRAs

Roth IRAs

Tax Benefits	Tax-deferred earnings & qualified tax free distributions.
Eligibility	Individual with earned income (& non-working spouse) under age 70 1/2 regardless of plan participation status or income. Contribution limits are phased out for modified adjusted gross income (MAGI) of Single:$107,000 Joint: $169,000-$178,999 Separate: $10,000
Deductibility of Contributions 2011 limits	Contributions are not deductible
Annual (2011 limits)	100% of earned income or $5,000 (for each spouse) Catch-up Contributions: IRA holders age 50 & older may contribute $1,000 over the basic annual contributions.
Rollover Contributions	If MAGI is less than or equal to $100,000, can convert Traditional, SEP, or SIMPLE IRA to Roth. Ordinary income tax on taxable amounts converted. No taxes due until withdrawn from IRA
Mandatory Distribution	None during lifetime. Beneficiary (except spouse) must begin at IRA owner’s death.
Taxes on Distribution	Qualified distributions are generally tax free & penalty free. Distributions of earnings are tax free & penalty free after 5 years & age 59 1/2. If earnings are taken earlier, they are subject to ordinary income tax & a 10% penalty.