Monday, March 26, 2007

Roth IRA rules

It is still not too late to get the tax savings associated with retirement accounts. As long as you open an IRA or a Roth IRA before the tax-filing deadline, you can claim that on this year’s return. If you are going for the Roth IRA option, there are certain rules to keep in mind before opening your account or contributing more money to it. Bankrate has the goods, once again.

Contribution limits
In general, Roth contributions are the same as traditional IRAs. Last year, you were able to contribute up to $4,000. The maximum annual contribution stays at that amount this year. …

Speaking of income, you must earn money to open any IRA. That means your only income can't be from unearned sources, such as investments. You must get paid wages, a salary, tips, professional fees or bonuses. … But if you make too much money, you're not eligible to open a Roth or to contribute to the account you opened when you were earning less. …

There is no age limit for Roth accounts. Whereas traditional IRA contributions are barred for individuals older than 70½, you can be any age and still contribute to a Roth IRA.

Roth IRA rules

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