Question |
Traditional Nonductible IRA |
Traditional Deductable IRA |
Roth IRA |
Are earnings currently taxed? |
No |
No |
No |
Taxation of withdrawals at death and
disability1 |
Contributions are recieved tax-free
and earnings are taxable |
All distributions are taxable |
No taxation of qualified distributions |
Taxation of $10,000 withdrawn for first-time
home purchase |
Proportionate part attributable to
earnings is taxable |
All $10,000 subject to income tax |
No income tax |
Taxation on withdrawals to pay for medical
expenses |
Proportionate part attributable to
earnings taxed as ordinary income. For those under age 59 1/2, 10% penalty
does not apply to amounts that qualify as deductible medical expense;
e.g. amounts in excess of 7.5% of AGI |
Entire Withdrawal taxable as ordinary
income. For those under age 59 1/2, 10% penalty does not apply to amounts
that qualify as deductible medical expenses; e.g., amounts en excess of
7.5% of AGI. |
Earnings are taxable at ordinary rates
unless IRA owner is age 59 1/2 or older and established Roth IRA five
or more years prior. |
Taxation on withdrawal to pay for educational
expenses |
Proportionate part attrubutable to
earnings is taxable. |
Entire withdrawal is subject to income
tax. |
Earnings are taxable at ordinary rates
unless IRA owner is age 59 1/2 or older and established Roth IRA five
or more years prior. |
Taxation of distributions not covered
above2 |
Nondeductible contributions recieved
tax-free. Earnings are taxed at ordinary rate. |
All distributions are taxable at ordinary
rates. |
Earnings are taxable at ordinary rates
unless IRA owner is age 59 1/2 or older and established Roth IRA five
or more years prior. |
Are there required, minimum distributions? |
Distributions must start at age 70
1/2. |
Distributions must start at age 70
1/2. |
No minimum distribution is required
during life of owner. |
By when must an IRA be set up and funded? |
Plan must be set up and funded by April
15 of calendar year following year to which the contribution applies. |
Plan must be set up and funded by April
15 of calendar year following year to which the contribution applies. |
Plan must be set up and funded by April
15 of calendar year following year to which the contribution applies. |
Basic eligibility requirements |
Any person under age 70 1/2 who has
compensation. |
Any person under age 70 1/2 who has
compensation. |
Any person of any age who has compensation. |
Maximum contribution |
Lesser of $30002 ($6,0003
for a married couple) or 100% of compensation. |
Lesser of $30002 ($6,0003
for a married couple) or 100% of compensation. |
Lesser of $30002 ($6,0003
for a married couple) or 100% of compensation. |
Is the contribution deductible |
No |
Yes, if participant is not covered by a qaulified plan. If one spouse is covered by a qualified plan, the nonparticipant spouse may make a deductible contribution, if filing jointly and adjusted gross income (AGI) is $150,000 or less. Deduction phased out for AGI between $150,000 and $160,000. If participant is covered by a qualified plan, fully deductible if AGI is $40,000 or less, if single, and $60,000 or less, if married.4 Not deductible if AGI is $50,000 or more, if single, and $70,000 or more , if married. Deduction phased out ratably between above limits.4 |
No |
