Roth IRA and Traditional IRA
Individuals can choose between a Roth tax-free IRA and a Traditional tax-deferred IRA.
With the Roth IRA, deposits are not tax deductible, but earnings are tax free if certain requirements are met. An existing IRA can be converted to a Roth IRA. Your annual income level determines whether you can contribute to a Roth IRA or convert an existing IRA to a Roth IRA.
Individuals with earned income may be able to contribute to a Traditional IRA. Contributions may be deductible, depending on an individual's income level and whether he or she is an active participant in a qualified retirement plan. Income taxes are deferred.
Contributions for the 2022 and 2023 Tax Years
Contributions for the 2022 tax year are $6,000 for individuals, and $12,000 for married couples who file jointly (up to $6,000 for each spouse's IRA). An additional $1,000 "catch up" contribution is available for individuals who are 50 or older.
Contributions for the 2023 tax year will be $6,500 for individuals and $13,000 for married couples who file jointly. An additional $1,000 "catch up" contribution will still be made available for individuals who are 50 or older.
More Flexible Withdrawals
With either IRA, withdrawals before age 59 1/2 can be made without the 10% IRS early distribution penalty for the purchase of a first home (up to $10,000) or higher education expenses.
You should consult your tax advisor about the tax consequences of IRA transactions.
Stop in or call one of our IRA counselor at (773) 685-5300. For current rates, check our website or call our Total Service Connection at (773) 685-3947.
IRS regulations apply to all IRAs. Consult your tax advisor today.
Federal regulations covering IRAs are subject to change.
FDIC regulations insure IRS rules and regulation.