| |
Who can contribute? |
|
How much can I contribute? |
|
What are the tax advantages? |
 |
Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation), with the following MAGI:*
• Up to $95,000 for single filers
• Up to $150,000 for joint filers
Reduced contributions allowed for higher incomes:
• Up to $110,000 for single filers
• Up to $160,000 for joint filers
|
 |
• $4,000 for 2006-2007 and $5,000 for 2008-2010
• For owners age 50 and older, your limits increase to $5,000 for 2006-2007 and $6,000 for 2008-2010
• Cannot exceed compensation
• Reduces contributions that can be made to traditional IRAs
|
|
• Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59 1/2, disability, death or a first-time home purchase**)
• Not required to start withdrawals at age 70 1/2
|
| |
|
| |
|
|
 |
Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation)
Anyone who havs received a distribution from a qualified retirement plan and decides to roll over the proceeds of the plan into an IRA
|
|
• $4,000 for 2006-2007 and $5,000 for 2008-2010
• For owners age 50 and older, your limits increase to $5,000 for 2006-2007 and $6,000 for 2008-2010
• Cannot exceed compensation
• Reduces contributions that can be made to Roth IRAs
|
|
• Earnings grow tax-deferred until withdrawn
• Contributions may be tax-deductible
|
| |
|
| |
|
|
 |
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 age 18 (except for special needs beneficiaries)
|
|
$2,000 per child each year
Limit applies to all Coverdell Education Savings Accouns (ESA) for the same child
|
|
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
Not intended as tax advice. Please consult a tax professional.
* MAGI: Modified Adjusted Gross Income for the federal tax form
** Lifetime limit for exemption on first-time home purchase is $10,000
*** Formerly known as the Education IRA
|
| |
|
|
|
|
 |
Don't cash out, roll it over!
Roll over your retirement plan dollars into an IRA
If you leave your job or retire, and you have earned benefits in a qualified retirement plan you can keep the tax-deferred status of the funds by rolling them over directly into a traditional IRA. Through a direct rollover, you postpone paying taxes and you avoid the mandatory 20% federal income tax withholding.
Funds from a qualified retirement plan cannot be moved directly into a Roth IRA. They must first be deposited into a traditional IRA; then they can be converted into a Roth IRA.
|
 |
