are roth ira contributions taxed
Roth IRA contributions are not taxed at the time you contribute the funds to your Roth IRA. However, your contributions come from post-tax income. You pay taxes on your income today, but not in the future. Your ROTH IRA withdrawal will be tax free if: 1  You withdraw just the amount of your original contributions, regardless of your age. 2  You are age 59 ½ or older and have had your ROTH for five years or longer (as measured from the first of the year for which you first established and contributed to your ROTH). You paid tax on that income when you first contributed to the Roth IRA. If the withdrawal is made before age 59 and 1/2 and is only up to the amount that has been contributed to the Roth IRA then no income tax is charged. Withdrawals of contributions are tax-free. Learn about the deadlines, income limits, and contribution limits for contributing to Traditional and Roth IRAs each year. Deadline for contributions for the 2014 tax year: April 15, 2015. 1  Contribute to your Fidelity IRA.Log In Required. 2  Set up automatic contributions to your Fidelity IRA. For both 2010 and 2011, eligible individuals may contribute a maximum of $5,000 per year to a traditional IRA, Roth IRA or combination of the two. The limit is $6,000 for those who are at least age 50 by December 31. Contributions for a tax year can be made until April 15 of the following year. Note: The article below refers to the 2014 tax year. You have until the tax filing deadline–April 15, 2014–to make a 2013 contribution. Click here for Roth IRA Eligibility rules or visit these links for current contribution limits, or current income limits. Roth IRA contributions are not taxed at the time you contribute the funds to your Roth IRA. However, your contributions come from post-tax income. The tax breaks for a Roth IRA are different. Unlike a contribution to a traditional IRA, a Roth IRA contribution is never deductible. Taking the above example, you'd still be taxed on $30,000, even though you had put the same $5,000 into a Roth IRA. 1 (With a deductible IRA you have to report a deduction on your 1040 form when you make a contribution; on withdrawal you report the entire withdrawal amount as taxable income.). 2  Roth is flexible: because you've taken care of your tax obligations up front you tend to face fewer restrictions later. A Roth IRA is an IRA that, except as explained below, is subject to the rules that apply to a traditional IRA. You cannot deduct contributions to a Roth IRA. If you satisfy the requirements, qualified distributions are tax-free. You can make contributions to your Roth IRA after you reach age 70 ½.
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