Yes, but the total combined contribution for the year may not exceed the maximum contribution described above. You must decide whether it is better to make a contribution to a traditional IRA, which might give you an immediate tax deduction, or contribute to a Roth IRA where you forgo the deduction but have the possibility of long-term growth that may later go untaxed.

Yes. A small business owner who elects to open an Individual 401(k) plan may also contribute the maximum dollar amount allowable under current law to an IRA or Roth IRA. However, contributions may not be deductible.

Yes, as long as you follow IRS guidelines and your total contribution to both IRA types does not exceed 100% of earned income up to contribution limit. Learn more. North Shore Bank does not guarantee the information listed on our 3rd party links. The material on these pages may change over time and North Shore Bank is not responsible for the content that appears on these pages.

If you are single and have compensation from employment or earned income from self-employment and your modified adjusted gross income (MAGI) is less than $95,000, you can make the maximum annual contribution, regardless of your age; if your MAGI is more than $95,000 but less than $110,000, you can make a partial contribution.

Rollover - A distribution from a traditional IRA can be contributed to a Roth IRA within 60 days after distribution. Trustee-to-trustee transfer - The financial institution holding the traditional IRA assets will provide directions on how to transfer those assets to a Roth IRA with another financial institution.

Yes, you can make contributions to both a designated Roth account and a traditional, pre-tax account in the same year in any proportion you choose. However, the combined amount contributed in any one year is limited by the 402(g) limit - $15,000 for 2006 ($15,500 in 2007 plus an additional $5,000 in catch-up contributions if age 50 or older).

Yes. A spouse who does not earn income but who files a joint federal income tax return can contribute up to $4,000 ($4,500 if you are age 50 or older in 2005 and $5,000 if you are age 50 or older in 2006) to a Roth IRA based on the earned income of the joint filer and the MAGI on the joint return. These contributions are not deductible from current taxes.

Yes, you can. But remember that you can only contribute up to $3,000 per year to any combination of Traditional and Roth IRAs that you have. You cannot contribute $3,000 to each.

Yes, as long as the amount of your contributions does not exceed $4000. For example, if you were eligible to make a $2000 deductible contribution to a Traditional IRA, you can also make a $2000 non-deductible contribution to a Traditional or Roth IRA.

The Roth IRA was first introduced in 1998, quickly gaining popularity as the new retirement planning investment vehicle. The main difference between the Roth IRA and the Traditional IRA is that contributions to a Roth IRA are not tax deductible and therefore come from after-tax income. However, the income generated by the Roth IRA is tax-free upon qualified withdrawal. In other words, traditional IRAs offer tax deferral while Roth IRA earnings are

The contribution limits for both the Traditional and Roth IRA for 2006 and 2007 is $4,000 with a "catch up" contribution of $1,000 for those age 50 and over. There are several factors to determine the deductibility of Traditional IRA contributions and the eligibility of Roth IRA contributions based upon adjusted gross income and participation in other retirement plans.

While the Traditional and Roth IRA have different eligibility requirements, the main difference between the Roth IRA and the Traditional IRA is when taxation occurs. A traditional IRA is considered "Pre" tax thus reducing your taxable income in the year contributed. A Roth IRA is "Post" tax thus not reducing your current year taxable income. When distributions are taken after 59 ½ from a Traditional IRA both the contributions and the earnings will be part of your taxable income.

The maximum contribution is $4,000 for 2005 and 2006 or 100% of your compensation, whichever is less. If you are eligible and choose to make contributions to both a Traditional IRA and a Roth IRA, the total of your contributions to both may not exceed the lesser of $4,000 for 2005 and 2006 or the 100% of compensation limit. In addition, catch-up contributions of $500 for 2005 and $1,000 for 2006 are permitted for any individual who is 50 or older.

A Roth IRA offers significant advantages over a traditional IRA. Chief among them is that the income earned by your Roth IRA, in most cases, is not taxable when you receive it after your retirement (age 59½). Also, Roth IRAs are generally not subject to the required minimum distribution rules that apply to traditional IRAs for persons age 70½.

The following chart shows some of the differences and similarities between the Traditional and Roth IRAs. Visit our Retirement Central pages for more detailed information on Traditional and Roth IRAs. Of course the best place for information for your personal IRA strategy is your tax advisor. Since CDF is not in the business of providing legal or tax advice we strongly suggest that you contact your legal or tax counsel.

No. IRAs may only be transferred to the same type of IRA (i.e. Traditional to Traditional, Roth to Roth, etc.) Also note that IRAs cannot contain any margin loans, short positions, or equity option positions.

You must perform this conversion before you transfer your IRA to IB. Your Modified Adjusted Gross Income can't exceed $100,000 (single or joint filers) in the year of the conversion.

No. SEP contributions can be made to Traditional IRAs only. While it is possible to convert a Traditional IRA containing SEP contributions to a Roth IRA, subsequent SEP contributions must be made to a Traditional IRA.

No, but the employee participant may convert the SEP IRA into a Roth and pay the tax due on the conversion.

Anyone under age 70½ with earned income can contribute up to $4,000 per year to a Traditional IRA. However, whether or not you qualify to deduct your contributions is determined by whether you or your spouse participate in an employer-sponsored retirement plan and the amount of your adjusted gross income (AGI). of 2005, any person at any age can contribute up to $4,000 per year to a Roth IRA as long as you or your spouse have earned income and your AGI is within established income limits.

A conversion is a taxable movement of assets from a Traditional IRA to a Roth IRA. The amount converted will be subject to full taxation in the year of the conversion. The funds, however, will not be subject to the 10% premature distribution penalty.

Yes. Tax law provisions allow you to convert (roll over) your Traditional IRA to a Roth IRA. Certain eligibility requirements (income and tax filing status) apply, such as: your AGI cannot exceed $100,000, and married individuals filing separately may not convert Traditional IRAs to Roth IRAs. Conversion is considered a taxable distribution from your current Traditional IRA for prior earnings and deductible contributions, but not subject to the 10% penalty tax.

The biggest difference in the two types of IRA accounts is that the Traditional IRA includes tax differed earnings, income replacement for retirement, and, in some cases, an income tax deduction. Members defer paying the taxes until they are retired and in a lower tax bracket A Roth IRA allows only nondeductible contributions but features tax-free withdrawals for certain distribution reasons after a five-year holding period and reaching 59 ½ years old.

The annual maintenance fee for both a traditional IRA and a Roth IRA is $10. This fee is per type of account. So, for example, if you have a traditional IRA account with money invested in each of five funds, your annual maintenance fee would be $10. If you have a traditional IRA account and a Roth IRA account, each with investments in one or more funds, your maintenance fee would be $20. The fee for termination, rollover, or transfer of account to a successor custodian is $10.

You must complete the conversion within 60 days. Because Tax penalties can be assessed if not handled properly, we recommend that you check with a North Shore Bank Investment Advisor or your tax advisor before initiating this type of transaction. No. Unlike with traditional IRAs, which require distributions to begin at age 70, your earnings can continue to grow in a Roth IRA until you need them.