What is Compensation?
Compensation is the salary or wages you receive as an employee. If you are self-employed, compensation is your net income for personal services performed for the business. All taxable alimony is considered compensation. Interest, dividends, and most rental income is passive income and is not considered compensation.

How Much Can I Contribute to My IRA?
You may contribute any amount up to 100 percent of your compensation or $2,000, whichever is less, to a traditional IRA, (or to both a traditional and a Roth IRA).

Do I Pay Taxes on the Earnings of My IRA?
All earnings on your IRA contributions (deductible and/or nondeductible), remain tax deferred until you make withdrawals from the IRA account.

Do I Get a Tax Deduction for My Contribution?
Deductibility of your contribution is based on whether or not you or your spouse are an active participant in an employer-maintained retirement plan. If you are single and not an active participant, you are eligible for a full $2,000 deduction no matter how large your income. If you are not an active participant but your spouse is, you are still eligible for a full deduction if you file jointly and your combined modified adjusted gross income (MAGI) is below $150,000 or a partial deduction if your joint MAGI is between $150,000 and $160,000. If you are an active participant, the deductible amount is dependent on your MAGI and income tax-filing status. You may be eligible for the maximum deduction, a partial deduction, or no deduction.

What if I'm Not Eligible for a Deductible IRA Contribution?
You can still make nondeductible contributions to your IRA. You may also be eligible for a Roth IRA.

Can I Withdraw Funds From My IRA Without Incurring any Penalties?
You can withdraw funds from your IRA without the 10 percent IRS premature-distribution penalty any time after you reach age 59 ½. You can also avoid the premature-distribution penalty before age 59 ½ if you become disabled or die, if the distributions are part of certain periodic payments, for medical expenses in excess of 7.5 percent of your adjusted gross income, for health care insurance if you have been receiving unemployment compensation for at least 12 weeks, for qualified higher education expenses, or for a first time home purchase. When you reach age 70 ½, you must begin to take your minimum required distributions or severe penalties will be imposed.

How are the Funds Taxed at Distribution?
If you are over age 59 ½, simply include the taxable portion of the amount withdrawn (generally, deductible contributions and all earnings) as income. However, if you are under the age of 59 ½ and do not meet one of the exceptions, you must also pay a 10 percent IRS penalty for premature distribution. The nondeductible portion of the distribution is not taxable when withdrawn nor is it subject to the 10 percent premature-distribution penalty.

What is a Spousal IRA?
The spousal IRA rules allow a married person to make an IRA contribution for his/her spouse. A couple can contribute up to 100 percent of their combined earned income or $4,000, whichever is less. The amounts can be divided in any manner between the two IRAs as long as no more than $2,000 is contributed to either IRA.

When Is the Contribution Deadline for Funding an IRA?
IRAs for the taxable year can be opened and funded any time between January 1 and the date your tax return is due for the year, excluding extensions. This due date is normally April 15th of the following year.

How Do I Open an IRA?
Simply see any of our IRA Representatives. We will explain the nature of these accounts in more detail and help you complete the simple forms necessary to establish your IRA.

To reach an IRA Representative call 1-800-698-2265.