Roth IRA

Roth IRA

  • Contributions to a Roth IRA are after tax contributions, therefore distributions are not subject to federal income tax. The earnings are generally tax free.
  • There is no maximum age for making Roth IRA contributions.
  • You are not required to take distributions from a Roth IRA during your lifetime, but there may be specific death distribution rules that apply to your beneficiaries.
  • If the withdrawal is a qualified distribution*, it is not subject to the IRS early distribution penalty.

*Qualified Distribution – A withdrawal is a qualified distribution if:

  • Paid to you after you attain age 59 ½.
  • Must be invested at least five years. (Roth IRA)
  • Must be paid after a five-taxable year period that begins with the earlier of:
    • The first taxable year for which you made a Roth IRA contribution or the first taxable year in which you converted from traditional to Roth.
    • Paid to you when you are disabled.
    • Paid to you for a qualifying home purchase.
    • Paid to your beneficiary after your death.

If a withdrawal from a Roth IRA is a qualified distribution, it is NOT subject to federal income tax. A qualified distribution is also exempt from the IRS early distribution penalty.

A distribution that is not a qualified distribution may be taxable and may be subject to the IRS early distribution penalty. Confer with your trusted tax preparation specialist for more specific guidance.

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