- Individuals with adjusted gross income (AGI) up to $95,000
and married couples with AGI up to $150,000 can make full contributions
to a Roth IRA. Married couples filing single returns can only contribute
if their adjusted gross income is under $10,000.
- The total amount you may contribute to a Roth IRA for any taxable year
cannot exceed the lesser of $3,000 in tax year 2004 and $4000 in tax years
2005-2007. Individuals over 50 can contribute $3500 in 2004 and $4500 for
2005-2007.
- If you maintain a Traditional IRA, the maximum contribution to your Roth
IRA is reduced by any contributions made to your Traditional IRA.
Traditional IRA vs. Roth IRA:
- Unlike contributions to a Traditional IRA, contributions to a Roth IRA
are not deductible.
- Distributions from a Roth IRA are tax-free if held for at least five
years and used for a qualified purpose such as reaching age 59 1/2, disability,
first home purchase, or death.
- Contributions may be made after age 70 1/2. No required minimum distribution
rules apply.
Traditional IRAs may be converted to Roth IRAs provided the taxpayers adjusted
gross income is under $100,000.
NOTE: As a discount broker, Trading Direct does not provide
advice as to security selection. Taking into consideration the factors of
time horizon, investment objectives, and risk tolerance, it is up to the
individual to select his/her own investments, which he/she believes will
generate sufficient returns.
DISCLOSURE: THE ABOVE INFORMATION PRESENTS GENERAL INFORMATION
ONLY, IS THOUGHT TO BE ACCURATE AS OF JANUARY 2005, AND IS SUBJECT TO CHANGE
BASED UPON EVER CHANGING US TAX LAWS. TO MAKE CERTAIN THAT OPENING A PARTICULAR
ACCOUNT WILL SUIT YOUR NEEDS, BE SURE TO CONSULT A QUALIFIED TAX RESOURCE.