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Taxpayers can contribute up to $5,000 per year into a Roth IRA. Taxpayers over age 50 can contribute an additional ‘catch-up’ contribution of $1,000 for a total of $6,000. To contribute to a Roth IRA you need to have earned income at least up to the amount of the contribution. … Continue reading »
A Roth Conversion is when funds are taken out of an IRA and converted into a Roth IRA. This conversion results in taxable income. Here are 4 Reasons to do a Roth Conversion:
Traditional IRAs were designed to provide an opportunity for people to save for retirement on a pre-tax, tax-deferred basis. In other words, the money grows without having to pay any taxes currently on the gains.
Here are the five reasons everyone should contribute to an IRA.
1) Income Tax Deduction. Many taxpayers who contribute to an IRA will get a tax deduction. Some taxpayers with higher incomes that participate in a retirement plan at work will not be able to get a tax deductible IRA. Taxpayers are allowed to contribute $5,000 annually to an IRA if they have at least that amount of earned income and are under age 70. Taxpayers over age … Continue reading »
Deciding whether to open an IRA or a Roth IRA is a major decision with potentially large financial consequences. Both forms of the IRA are great ways to save for retirement, although each offers different advantages and rules.