Retirement savings are a wonderful tax shelter. But, to maximize these tax savings, you must understand the Roth IRA rules. You can see texas gold depository ira for more information.
Although retirement plans offer tax protection,Guest Writing is a good way to do so. However, you must understand Roth IRA rules and other contributions requirements in order to get the most out of your tax savings. Contributions to a retirement savings account are made pretax. The employer matches employee contributions to the plan. However, that income is not taxable until it has been received by the employee.
Roth IRA contributions are not deductible but income earned and future withdrawals can be tax-free.
Keep reading to find out more about Roth IRA rules.
The Roth IRA
Roth IRA contributions can only be made up to $5000 per year. You can contribute up to $6000 to a Roth IRA if you are over 51. Based on current inflation rates, these contribution limitations will rise in 2009. They will rise in increments of $500.
Roth IRAs are subject to income eligibility requirements. The basic rule is that you cannot make the maximum contribution if you have a Modified Adjusted gross Income (MAGI). For example, a married couple could earn between $150,000-$160,000 and a single individual can earn between $95,000-$110,000 less. If they do not, they will need to opt for a plan called a 401 (k).
401 (k), Roth
Employees have the option of making some of their Roth retirement contributions. In the past, any deferred salaries or 401k contributions were taken out of your taxable wages. However, Roth contributions to the 401(k), Roth are now included in a person’s wages. These contributions may be exempt from federal income taxes.