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Traditional IRA
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Roth IRA
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Contributions
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Tax-deductible, subject to income limitations
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Not tax-deductible
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Earnings
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Tax-deferred earnings
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Tax-free earnings
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Annual Contribution Limits
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2020: $6,000, $7,000 if 50 or older
2021: $6,000, $7,000 if 50 or older
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2020: $6,000, $7,000 if 50 or older
2021: $6,000, $7,000 if 50 or older
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Eligibility
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2020: Anyone under 70½ who has earned income
2021:No age or income restrictions
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2020:
- Eligible to Contribute up to the Limit: Individuals with adjusted gross income of less than $124,000 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $196,000 if married and filing a joint return
- Eligible to Contribute a Reduced Amount: Individuals with adjusted gross income of $124,000-$138,999 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $196,000-$205,999 if married and filing a joint return; less than $10,000 if married filing separately and you lived with your spouse at any time during the year
2021:
- Eligible to Contribute up to the Limit: Individuals with adjusted gross income of less than $125,000 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $198,000 if married and filing a joint return
- Eligible to Contribute a Reduced Amount: Individuals with adjusted gross income of $125,000-$139,999 if filing as single, head of household, or married filing separately and did not live with a spouse at any time during the year; $198,000-$207,999 if married and filing a joint return; less than $10,000 if married filing separately and you lived with your spouse at any time during the year
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Federal Taxation on Withdrawals
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Subject to income tax on earnings and deductible contributions
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Distributions of contributions are tax-free and distributions of earnings are tax free if Roth IRA is held for at least five years and individual has reached age 59½; exceptions may exist if the distribution is due to death, disability, first-time home purchase, or post-secondary education
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Distributions
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Minimum distribution required after age 70½
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None
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