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Return to IRA Info center |
Traditional
IRA |
Roth
IRA |
Coverdell
ESA
(formerly Education IRA) |
| Qualifications |
Must
have earned income and not reached age 70 1/2 by the end of the year. |
Must
have earned income. There are no age restrictions. |
The
designated beneficiary must be an individual under the age of 18.
The age 18 limitation will not apply to any designated beneficiary
with special needs
|
Maximum
Contributions |
Taxable
years beginning
In 2004.................$3,000
In 2005 - 2007.......$4,000
In 2008 and after...$5,000*
In 2009 and after $5,000 plus $500
annual inflation adjustments |
Taxable
years beginning
In 2004.................$3,000
In 2005 - 2007.......$4,000
In 2008 and after...$5,000*
In 2009 and after $5,000 plus $500
annual inflation adjustments |
Taxable
years beginning
In 2004 and after..........$2,000
(per beneficiary)
| Contributions
do not count against the limits for IRAs |
|
Catch-Up
(50+Over) |
In
2004 - 2005.... $500
In 2006 and after..$1,000 |
In
2004 - 2005.... $500
In 2006 and after..$1,000
|
|
Tax
Status
of Earnings |
Tax-deferred
until withdrawal |
Not
taxed. Earnings grow tax-free. |
Not
taxed. Earnings grow tax-free. |
Contribution
Restrictions |
Yes,
if active participant in employer retirement plan.
| CONTRIBUTION
PHASEOUTS |
| |
SINGLES |
MARRIED
JOINT |
| 2004 |
$45,000-$55,000 |
$65,000-$75,000 |
| 2005 |
$50,000-$60,000 |
$70,000-$80,000 |
| 2006 |
SAME
AS 2005 |
$75,000-$85,000 |
| 2007 |
SAME
AS 2005 |
$80,000-$100,000 |
|
Yes,
contributions phase out between $95,000-$110,000 for singles, $150,000-$160,000
for married couples filing jointly, and $0-$10,000 for married couples
filing separately. |
Yes,
contributions phase out between $95,000-$110,000 for singles and
married couples filing separately, and $190,000-$220,000 for married
couples filing jointly. |
| Tax
Deduction |
Yes.
Contributions up to the limit are fully tax deductible if you are
not an active participant in a retirement plan. Otherwise phase out
rules apply. |
No. |
No. |
Penalties
for
Early Withdrawal |
| None if: |
- Over
59 1/2
- Death
or disability
- Qualified
medical expenses
- Certain
health insurance
- Qualified
college expenses
- 1st
time home purchase (up to $10,000)
- Due
to IRS levy
- Periodic
payments
|
|
| None if: |
- Over
59 1/2
- Death
or disability
- Qualified
medical expenses
- Certain
health insurance
- Qualified
college expenses
- 1st
time home purchase (up to $10,000)
- Due
to IRS levy
- Periodic
payments
|
|
| None if: |
- For
payment of qualified education expense, including elementary
and secondary schools (K-12th)
|
|
Required
Distributions |
Must
begin by April following year participant turns 70 1/2. |
Only
after death of the participant. |
Must
be complete 30 days after beneficiary reaches age 30 or dies. |
Contributions
After Age 70 1/2 |
Not
allowed. |
Allowed. |
Allowed. |
