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IRAs (Individual Retirement Accounts)

Traditional IRAs

A traditional IRA is a personal savings plan that gives you tax advantages for setting aside money for retirement.

  • Contributions you make to a traditional IRA may be fully or partially deductible, depending on your circumstances and
  • Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until distributed.

Click here to view Publication 590, explains the nuts and bolts of IRAs including:

  • Setting up an IRA
  • Contributing to an IRA
  • Transferring money or property to and from an IRA
  • Handling an inherited IRA
  • Receiving distributions (making withdrawals) from an IRA
  • Taking a credit for contributions to an IRA
  • A comparison of traditional and Roth IRAs

It also explains the penalties and additional taxes that apply when the rules are not followed. To assist you in complying with the tax rules for IRAs, Publication 590 contains IRA worksheets, sample forms, and tables.

Investing your traditional IRA in a way that makes the most sense for your circumstances is easier with this information from the Securities and Exchange Commission (SEC), Click here for that information.

 "Managing Your IRA" video - a discussion on basic principles of investing. (3:00 min.)

Roth IRA

A Roth IRA is an individual retirement arrangement that, except as explained below, is subject to the rules that apply to a traditional IRA. It can be either an account or an annuity. Individual retirement accounts and annuities are described in Traditional IRAs.

To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. A deemed IRA can be a Roth IRA, but neither a SEP-IRA nor SIMPLE IRA can be designated as a Roth IRA. Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. But, if you satisfy the requirements, qualified distributions (defined in Publication 590) are tax free. Contributions can be made to your Roth IRA after you reach age 70 1/2 and you can leave amounts in your Roth IRA as long as you live.

Details about Roth IRAs are contained in Publication 590, Individual Retirement Arrangements (IRAs) and include:

  • Setting up your Roth IRA;
  • Contributions to your Roth IRA; and
  • Distributions (withdrawals) from your Roth IRA.