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IRA
GUIDE FOR INDIVIDUAL INVESTORS
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Traditional
IRA
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Roth
IRA
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CONTRIBUTIONS
for TAX YEAR 2003
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Maximum
annual
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Lesser of $3,000 (A) or 100% of earned income
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Taxpayers
age 50 or older may contribute up to $3,500
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Upfront
tax-deductible?
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Yes,
if qualified (B)
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Nondeductible
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Contribution
age limits
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Up
to, but not after, the tax year in which you will turn
70.5 (generally, earned income required)
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Up
to and after age 70.5 (generally earned income required)
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Limits
on AGI (adjusted gross income) or MAGI (modified adjusted
gross income)
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Full
deduction for active participants of another retirement
plan if income is:
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at
or below $60,000 for married joint filers (C)
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at
or below $40,000 for single filers (C)
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To
make maximum contribution, income must be:
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no
more than $150,000 for married joint filers (D)
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no
more than $95,000 for single filers (D)
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DISTRIBUTIONS
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Required
minimum distribution applicability
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April
1 following the year owner reaches age 70.5
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Not
required during IRA holder's lifetime
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ELIGIBILITY
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Age
requirement
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An
account holder must not have reached age 70.5 during
the taxable year for which the contribution is made.
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Minimum
age requirements for annuities are determined by individual
state insurance guidelines.
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No
maximum age limits
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Minimum
age requirements are determined by individual state insurance
guidelines. |
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Employment
requirement
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Generally,
IRA owner may be any employed individual or non-working
spouse.
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Generally,
IRA owner must have earned income equal to or exceeding
the amount of contributions.
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DEADLINES
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Contributions
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Tax
year contributions must be postmarked by individual
tax return filing deadline (usually April 15) of the
following calendar year.
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(A)
Combined contribution to both traditional and Roth
IRAs cannot exceed $3,000 annually ($3,500 for those
age 50 or older). Generally, an owner's (and his
or her spouse's) compensation must be equal or exceed
the amount of contributions to a traditional IRA
or a Roth IRA.
(B)
IRA deductions may be eliminated or reduced for taxpayers
who are active participants in qualified retirement
plans if their AGI exceeds certain limits. For individuals
who are not active participants but whose spouses
are, deductibility of traditional IRA contributions
is phased out if the couple's AGI is between $150,000
and $160,000, assuming taxes are filed jointly.
(C)
The maximum deductible contribution is phased out
for single filers with AGI between $40,000 and $50,000
and for married joint filers with AGI between $60,000
and $70,000.
(D) The maximum contribution is phased out for single
filers with MAGI between $95,000 to $110,000 and for
married joint filers between $150,000 to $160,000.
Participation in a pension plan does not limit contributions
to a Roth IRA.
(E) The maximum contribution is phased out for single
filers with MAGI between $95,000 to $110,000 and for
married joint filers between $190,000 to $220,000.
Participation in a pension plan does not limit contributions
to a Roth IRA.
(F)
Remaining accounts may be rolled over to a Coverdell
Education Savings Account in the name of another
beneficiary in the beneficiary's family or it can
be withdrawn, with the earnings being subject to
income taxes and possibly a 10 percent penalty tax.
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