IRA’s Traditional, Roth, SEP & Simple, Rollover IRA’s*
Any individual with earned income who is under 70½. A nonworking spouse under age 70½ who files a joint return that includes earned income.
Deducibility Phase-out: If an individual has a retirement plan at work they, can only fully deduct IRA contribution if: A. Single w/AGI of $64,000 or less B. Joint(IRA owner is active plan participant) w/AGI of $103,000 or less C. Joint(IRA owner’s spouse, not IRA owner is active plan participant) w/AGI of $193,000 or less.
$6,000 total contribution to all Traditional IRAs and Roth IRAs in 2019. If age 50 or older, may add an additional $1,000 to total contribution.
Distribution penalty of 10% if taken before age 59½ (with certain exceptions) . Required minimum distributions will begin at age 70½
Single filer with earned income. (Eligibility to participate gradually phased out for modified AGI from $122,000–$137,000.)
Joint filers with earned income. (Eligibility to participate gradually phased out for modified AGI from $193,000–$203,000.)
Married, filing separately: eligibility to participate phased out at $10,000.
Same as Traditional IRA, subject to phase-out range depending on modified AGI.
Distributions from regular contributions can be made at any time without taxes or penalty. Converted amountsmust satisfy the 5-year investment period to avoid an early withdrawal penalty (except conversion amounts that were originally contributed to the Traditional IRA with after-tax money). Distributions from earningsare tax-freeif the initial contribution in the account was made at least 5 years ago andthe IRA holder meets one of the following conditions: is age 59½ OR is disabled OR is purchasing first home OR dies. Distributions from earningsare penalty-free(under same conditions as for Traditional IRA qualified distributions).
Small business owners and self-employed individuals who want a plan that is relatively easy to set up and administer.
25% of employee's compensation up to a maximum amount of $56,000
Distribution penalty of 10% if taken before age 59½ (with certain exceptions). Required minimum distributions will begin at age 70½
Employees who are employed by a company that does not maintain another retirement plan and has 100 or fewer employees earning at least $5,000 in or during the preceding year.
Eligible employees may defer up to $13,000 of their salary. If over the age of 50 you may defer $16,000.
Distribution penalty of 10% if taken before age 59½ (with certain exceptions). Penalty is increased to 25% if distribution is taken within two years of the date contributions were first deposited. Required distributions will begin at age 70½ in most cases.
*Source: Tax Facts
Information current, subject to legislative change and not intended to be legal advice. Consult a tax advisor regarding specific circumstances.