An IRA (Individual Retirement Account) may be established by a person with earned income. Contributions to a traditional IRA might be deductible or nondeductible from income when calculating income tax. If individuals or married couples filing jointly are active participants of a qualified plan or other retirement plan, there is an income test to determine deductibility of the IRA contribution. Contributions to a Roth IRA are not deductible from taxable income. However, withdrawals from the Roth IRA will not be taxed; withdrawals from a traditional IRA will be taxed.
Contributions may not be made to a traditional IRA after the owner attains age 70½. Contributions to a Roth IRA may be made after the owner is age 70½ if the owner has earned income.
Following is an online resource to learn more about IRAs. Investing for Your Future
www.extension.org/pages/Investing_for_Your_Future
We would like your feedback on this Personal Finance Frequently Asked Question.
