Roth IRA Accounts

Current IRA Tax Provisions

If you know you will need your money sooner than retirement, consider the Roth IRA.

Savings for a down payment on a house or other expenditure will add up to more with the higher interest paid on a Roth IRA. While you will have to pay taxes on the funds now, you will be saved those taxes when you use the money, and you do not incur any penalties for withdrawal after 5 years.

Here are some key elements of the Nondeductible Roth IRA:

• Penalty free withdrawals after 5 years
  
• Tax free earnings after age 59 1/2
• Contributions allowed after age 70 1/2 when employed
  
• No required distribution at age 70 1/2 or in your lifetime
  
• Tax-free if used for first home purchase (up to $10,000) or education
  
• Tax-free if disabled or upon death

There are guidelines based upon Adjusted Gross Income (AGI) which will increase progressively until 2001.

2002 Tax Law IRA Provisions
Beginning in 2002, the new tax law will increase the amount you can contribute to an Individual Retirement Account (IRA).

Roth IRA tax-year contributions will increase from the current $2,000 single taxpayer limit to progressively higher limits according to this Internal Revenue Code 219(b)(5)(A),(C) schedule:

• Eligible married couples filing jointly can also take advantage of the increases.

Age 50+ Catch-Up Provision
Individuals who are age 50 and older before the end of the taxable year, and before application of the Adjusted Gross Income phase-out limits, can increase their IRA contribution by:
• $500 for 2002 through 2005
• $ 1,000 for 2006 and thereafter.

Talk to your accountant or tax advisor about your Roth IRA options, then come and see us. We are your Roth IRA source.