This is a non-tax deductible account that features tax-free withdrawals for certain distribution reasons after a five-year holding period.
There are two requirements for eligibility to contribute to a Roth IRA: you or your spouse must have earned income and your modified adjusted gross income cannot exceed certain limits. Contributions can be up to 100% of your earned income or $7,000 for 2024, or $8,000 if age 50 or over; whichever is less, as long as your modified adjusted gross income is within prescribed limits.
Features
For a nonqualified distribution, the contributions are returned first and not subject to a tax penalty or taxation. If the distribution is qualified, you pay no tax on the earnings, and you never have to take a withdrawal as in a Traditional IRA.
Regular contributions are no longer limited by age.
