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Roth IRAs are an individual retirement accounts that is set up like a traditional IRA, but with some pretty significant differences. Unlike a traditional IRA, the contributions to Roth IRAs are not tax deductible. However, if certain requirements are satisfied, the distributions from Roth IRAs are tax free. Unlike a traditional IRA, you are not required to take mandatory distributions and you can continue to make contributions to a Roth IRA after reaching age 70 ½.
In 2005 and 2006 you can contribute to Roth IRAs as long as your Adjusted Gross Income or AGI is less than:
- $110,000 for those filing taxes as single, head of household or married filing separately (and you did not live with your spouse).
- 10,000 for married filing separately and you lived with your spouse.
- $160,000 if you filing status was married filing jointly
See our article on Roth Contribution Limits for a full explanation of the limits in 2005 and 2007.
Other forms of this term include -Roth IRA |
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