Roth IRA vs Traditional IRA
The following chart shows some of the differences and similarities between the Traditional and Roth IRAs.
| Traditional | Roth | |
| Maximum Contribution | $5,000 per Person per Year | $5,000 per Person per Year |
| Income Limitations | None | Singles - $110,000 Married - $160,000 |
| Federal Tax Deductibility | Sometimes | None |
| Federal Taxation at Distribution | As Regular Income | None if After Age 59½ and Funds in IRA More than Five Years* |
| Federal Taxation on Earnings | Deferred Until Distribution | None if After Age 59½ and Funds in IRA More than Five Years |
| Age 70½ Rules | Mandatory Distributions. No Further Contributions Allowed | None |
| Contribution Deadline | April 15 of Year Following Contribution Year | April 15 of Year Following Contribution Year |
| Transfers | Directly From Any Qualified Retirement Plan or IRA - No Taxes or IRS Penalties Due | Directly from any Roth Qualified Retirement Plan or Roth IRA. |
| Early Distributions | 10% Federal Tax Penalty for Unqualified Distributions | Distributions of Principal OK; 10% Federal Tax Penalty for Unqualified Distributions of Interest |
*Note: Distribution of principal contributions may be made at any time from Roth IRAs without penalty.
*Note: Traditional, SEP and Simple IRAs can be converted to Roth IRAs if AGI is under $100,000. Taxes due on pre-tax dollars in year of conversion.