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IRA Share Certificates

Contribution Limits
Roth IRA You may be able to contribute up to: $5,500 for 2014
For owners age 50 and older, you may contribute up to: $6,500 for 2014
Traditional IRA You may be able to contribute up to: $5,500 for 2014
For owners age 50 and older, you may contribute up to: $6,500 for 2014
Educational IRA You may contribute $2,000 per child each year; Maximum age 18
SEP IRA You may be able to contribute up to 25% of compensation; $52,000 for 2014; SEP contributions are made to a Traditional IRA

 

Traditional IRA

Who can contribute?

  • Anyone under the age 70 ½ who has income from compensation (or who is filing jointly with a spouse who earns compensation).
  • Anyone who has received a distribution from a qualified retirement plan and decides to move the proceeds of the plan into an IRA.

How much can I contribute?

  • You may be able to contribute up to: $5,500 for 2014.
  • For owners age 50 and older, you may be able to contribute up to: $6,500 for 2014

Who can make deductible contributions?

Fully deductible contributions:

  • Single individuals not active in employer retirement plans
  • Single individuals active in employer retirement plans with MAGI of less than: $70,000 (2014).
  • Married couples with neither spouse active in an employer retirement plan (see IRS publication 590).
  • Married individuals active in employer retirement plans with joint tax returns showing MAGI falling within defined limits.
  • Married individuals not active in employer retirement plans with spouses who are, as long as MAGI is $191,000 or less.

What are the tax advantages?

  • Earnings grow tax-deferred until withdrawn
  • Contributions may be tax-deductible

When can I withdraw without restrictions?

Withdraw IRS penalty-free for any of the following reasons:

  • Qualified higher-education expenses
  • First-time home purchase**
  • Age 59 ½
  • Disability
  • Qualifying medical expenses exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon the owner’s death
  • Payment of health insurance premiums while unemployed for 12 weeks or longer

MAGI – Modified Adjusted Gross Income

Roth IRA

Who can contribute? Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following MAGI:

  • Up to $114,000 for single filers
  • Up to $181,000 for joint filers

Reduced contributions allowed for higher incomes:

  • Up to $129,000 for single filers
  • Up to $191,000 for joint filers

How much can I contribute?

  • You may be able to contribute up to: $5,500 for 2014.
  • For owners age 50 and older, you may be able to contribute up to: $6,500 for 2014.

Who can make deductible contributions?

  • No one can deduct contributions

What are the tax advantages?

  • Earnings are tax-deferred and withdrawals are tax-free if the account is open for five tax years and withdrawals are for a qualified reason (age 59 ½ , disability, death, or first-time home purchase**).
  • Not required to start withdrawals at age 70 ½

When can I withdraw without restrictions?

  • Regular contributions can be withdrawn tax-free and penalty-free at any time
  • After the account has been open five years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59 ½ , disability, death, or first-time home purchase**

MAGI – Modified Adjusted Gross Income
**Lifetime limit for exemption on first-time home purchase is $10,000.

Educational IRA
(Coverdell Education Savings Account – ESA)

Who can contribute? Anyone who has MAGI:

  • Up to $95,000 for single filers
  • Up to $190,000 for joint filers
  • Some people with higher MAGI may be able to make smaller contributions
  • Contributions not allowed after the beneficiary reaches 18 (except for special needs beneficiaries) Businesses may also contribute and are not subject to the MAGI limits

How much can I contribute?

  • $2,000 per child per year
  • Limit applies to all Coverdell Education Savings Accounts (ESA) for the same child

Who can make deductible contributions?

  • No one can deduct contributions

What are the tax advantages?

  • Withdrawals for certain qualified education expenses are tax-free
  • Qualified education expenses include tuition, fees, books, computer equipment, and technology required for elementary, secondary, and post-secondary education.
  • A beneficiary may receive tax-free distributions from a Coverdell ESA in the same year he or she claims the Lifetime learning or HOPE Scholarship tax credits.

When can I withdraw without restrictions?

  • Withdrawals are tax-free and penalty-free only for qualified education expenses (earnings are subject to tax and penalty for most other withdrawals)
  • Funds can be transferred from one child’s account to a account for another child in the family

MAGI – Modified Adjusted Gross Income

SEP IRA (Simplified Employee Plan / Pension)

Who can contribute?

  • An employer, or self-employed person SEP contributions applied to Traditional IRA How much can I contribute?
  • Up to 25% of compensation; not to exceed $52,000 (2014) Who can make deductible contributions?
  • Employer or self-employed person. What are the tax advantages?
  • Earnings grow tax deferred until withdrawn
  • Contributions may be tax-deductible

When can I withdraw without restrictions?
Withdraw IRS penalty-free for any of the following reasons:

  • Qualified higher-education expenses
  • First-time home purchase
  • Age 59 ½
  • Disability
  • Qualified medical expenses exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon the owner’s death
  • Payment of health insurance premiums while unemployed for 12 weeks or longer