Roth IRA Vs Traditional IRA 2009
Last Updated March 22, 2009
Appleby Cheat Sheets ™- Roth Vs Traditional IRA – For tax year 2009
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Roth IRA
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Traditional IRA
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Regular contribution
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$5,000
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$5,000
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Catch-up contribution
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$1,000
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$1,000
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Contribution eligibility (in addition to being required to have eligible compensation/income).
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Tax filing Status
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MAGI
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Allowed amount
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Any individual who is under age 70 ½ at the end of the year.
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Single
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$105,000 or less
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100%
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$105,000 - $120,000
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Partial
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$120,000 or more
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None
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Married filing jointly
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$166,000 or less
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100%
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$166,000 - $176,000
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Partial
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$176,000 or more
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None
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Married filing separately
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Less than $10,000
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Partial
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$10,000 or more
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None
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Contribution deadline
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April 15, 2010
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April 15, 2010
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Deductibility
· For traditional IRAs, contributions are 100% deductible, if the individual is not an active participant, or is married to an active participant.
· The limits shown in the traditional IRA column are for active participants
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Contributions are not deductible
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Tax filing Status
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MAGI
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Allowed deduction
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Single
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$55,000 or less
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100%
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$55,000 - $65,000
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Partial
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$65,000 or more
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None
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Married filing jointly and active
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$89,000 or less
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100%
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$89,000- $109,000
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Partial
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$109,000 or more
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None
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Married filing jointly not active, but spouse is active
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$166,000 or less
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100%
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$166,000- $176,000
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Partial
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$176,000 or more
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None
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Married filing separately
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Less than $10,000
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Partial
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$10,000 or more
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None
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Age Limitation
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No Age limitation on contributions
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No contributions allowed for the year taxpayer attains age 70 ½ and later.
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Source of funding
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IRA Participant Contributions
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IRA Participant Contributions
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Rollover and Transfers from other Roth IRAs
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Rollover and Transfers from other Traditional IRAs, SEP and SIMPLE IRAs
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Spousal IRA contributions
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Spousal IRA contributions
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Conversions from traditional, SEP and SIMPLE IRAs, non-Roth qualified plans, 401(k) 403(b)s, 403(a) plans and governmental 457(b) plans
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Rollovers from non-Roth qualified plans, 401(k), 403(b), 403(a) and governmental 457(b) plans
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SEP IRA employer contributions. Financial institution may require account to be SEP-IRA
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Tax Credit
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Available for Saver’s Tax Credit
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Available for Saver’s Tax Credit
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Treatment of earnings on IRA investments
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Earnings grow on a tax-deferred basis. However, qualified distributions of earnings are tax-free. Non-qualified distributions of earnings are taxable.
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Earnings grow on a tax-deferred basis. Earnings are added to taxable income for the year distributed
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Distributions Rules
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Distributions may be taken at anytime. Distributions will be tax and penalty free if qualified.
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Distributions may be taken at anytime. Amounts will be treated as ordinary income, and will be subject to early distribution penalty if withdrawn while under the age of 59 ½ , unless an exception applies
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Required Minimum Distribution(RMD)
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Owners are not subjected to the RMD rules. Beneficiaries are subjected to RMD rules.
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IRA owners must begin taking RMDs, as of April 1 of the year following the year they reach age 70 ½. Beneficiaries are also subject to RMD rules.
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