- Contributions may be tax deductible.
- Earnings grow tax deferred.
- Distributions generally are taxable.
- Distributions before age 59 1/2 are subject to penalty tax, unless an early distribution penalty tax exception applies.
- Required minimum distributions must begin at age 70 1/2.
- Contributions are not tax deductible.
- Contributions generally can be distributed tax free at any time.
- Earnings grow tax deferred.
- Distributions are not required until after the Roth IRA owner dies.
- Earnings can be distributed tax free if the Roth IRA owner:
- made a Roth IRA contribution at least five years ago and
- is age 59 1/2 or older, disabled, deceased, or qualifies as a first-time homebuyer.
- $199,000 or greater: You cannot contribute to a Roth IRA but can make a full contribution to a Traditional IRA.
- $189,000 to $199,000: You can make a partial contribution to a Roth IRA and contribute to a Traditional IRA.
- $189,000 or less: You can make a full contribution to a Roth IRA or a Traditional IRA, or split between both.
- $135,000 or greater: You cannot contribute to a Roth IRA but can make a full contribution to a Traditional IRA.
- $120,000 to $135,000: You can make a partial contribution to a Roth IRA and contribute to a Traditional IRA.
- $120,000 or less: You can make a full contribution to a Roth IRA or a Traditional IRA, or split between both.
