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IRA/Roth Accounts

Traditional IRA:
Who can contribute?
Anyone under the age of 70-1/2 with income from compensation (or who is filing jointly with a spouse who earns compensation)

How much can I contribute?
Total combined contributions to Roth and traditional IRAs up to $4000.00/year or 100% of compensation, whichever is less; plus a $1000.00 catch-up contribution if you are 50 or older

Who can make deductible contributions?

  • A single person who does not participate in an employer retirement plan can deduct all contributions, regardless of income
  • A single person who participates in an employer retirement plan and has MAGI* less than $45,000.00 can deduct all contributions
  • A single person who participates in an employer retirement plan and has MAGI* of $45,000.00 to $55,000.00 may be able to deduct a portion of their contribution
  • A married couple where neither person participates in an employer retirement plan can deduct all contributions, regardless of income
  • A married person who participates in an employer retirement plan can deduct all IRA contributions if they file a joint tax return showing MAGI* of less than $65,000.00
  • A married person who participates in an employer retirement plan can deduct a portion of an IRA contribution if they file a joint tax return showing MAGI* of $65,000 to $75,000
  • A married person who does not participate in an employer retirement plan who is married to someone who is in an employer retirement plan can deduct all IRA contributions if the person files a tax return showing MAGI* of less than $150,000.00
  • A married person who does not participate in an employer retirement plan who is married to someone who is in an employer retirement plan can deduct a portion of an IRA contribution if they file a joint tax return showing MAGI* of $150,000 to $160,000.00

What are the tax advantages?

  • Earnings compound without tax until withdrawn
  • Contributions may be tax deductible

Can funds be withdrawn without penalty? Funds can be withdrawn penalty free for:

  • Qualified educational expenses
  • Withdrawal of up to $10,000.00 for first time home purchase
  • At age 59-1/2
  • If you become disabled
  • Qualifying medical expenses (withdrawal of earnings and deductible contributions results in taxable income)
  • Payment to beneficiaries at owner's death
  • Health insurance premiums while unemployed for 12 weeks or more

Roth IRA Account:
Who can contribute?

  • Married couples filing a joint tax return with MAGI* up to $150,000.00
  • Single tax filers with MAGI* up to $95,000.00
  • Couples and single tax filers with higher incomes may be eligible for reduced contribution

How much can I contribute?
Total combined contributions to Roth and traditional IRAs up to $4000.00/year or 100% of compensation, whichever is less; plus a $1000.00 catch-up contribution if you are 50 or older

What are the tax advantages?
Most contributions can be withdrawn tax-free and penalty-free at anytime.

Earnings can be withdrawn tax and penalty-free after the account has been open for five tax years for any of these reasons:

  • After age 59-1/2
  • If you become disabled
  • Death
  • First time home purchase

Credit up to 50%, is available for contributions of up to $2000 if the following requirements are met:

  • Married filing jointly with an adjusted gross(AGI) income of $30,000 or less
  • Head of Household with AGI of $22,500 or less
  • Single filer with an AGI of $15,000 or less

When can I withdraw without restrictions?

  • Regular contributions can be withdrawn tax-free and penalty-free at any time
  • Earnings are tax-free if account is open for five tax years and withdrawn for qualified reason
  • After you reach the age of 59-1/2

Coverdell Education IRA Account:

Who can contribute?

  • Single filer who has a MAGI* up to $95,000
  • Joint filer who has a MAGI* up to $190,000
  • Some people with higher MAGI may be able to make smaller contributions
  • Contributions are not allowed after the beneficiary reaches the age of 18 with the exception of a special-needs designated beneficiary

How much can I contribute?
You can contribute up to $2000 per child per year.

Who can make deductible contributions?
No one can deduct contributions.

What are the tax advantages?

  • Withdrawals for certain qualified education expenses are tax-free
  • Special needs beneficiaries can withdraw funds tax free to pay for qualified education expenses at any age
  • Qualified education expenses may include tuition, fees, books, computer equipment and technology required for elementary, secondary and post-secondary education
  • A beneficiary may receive tax-free distributions from an Education IRA in the same year he or she claims the Lifetime Learning or HOPE Scholarship tax credits

When can I withdraw without restrictions?

  • Withdrawals are tax- and penalty-free only for qualified education expenses (earnings are subject to tax and penalty for most other withdrawals)
  • Funds can be transferred from one child's account to an account for another child in the family

* MAGI is Modified Adjusted Gross Income from Federal Tax form
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formerly CU@HOME
Kirby Kangaroo
 
County-City Credit Union
106 East John Street
Jefferson, WI 53549

Phone: (920) 674-5542   |   Fax: (920) 674-5534
Email:mycu@countycitycreditunion.com