Roth IRA

(redirected from Non-Deductible IRA)
Also found in: Financial.
Related to Non-Deductible IRA: Traditional IRA

Roth IRA

 (ī′är-ā′)
n.
A modified individual retirement account in which a person can set aside after-tax income up to a specified amount each year. Earnings on the account are tax-free, and tax-free withdrawals may be made after age 59 1/2 .

[After William Victor Roth, Jr. (1921-2003), US congressman.]

Roth IRA


n.
an individual retirement account in which investments are made with taxable dollars, but withdrawals are tax-free after age 59 1/2.
[1997; after William V. Roth, Jr., senator from Delaware]
References in periodicals archive ?
Also, for clients with little or no IRA assets, those non-deductible IRA contributions can be rolled into Roth IRAs, often with no tax or penalty, and grow tax- and RMD-free for years.
Clients who have solely made non-deductible IRA contributions over the working years are obvious candidates for this strategy, especially as income tax rates are most likely on the rise.
Individuals who cannot deduct IRA contributions may still find a Traditional Non-Deductible IRA attractive.
If either spouse participates in an employer plan, both will be eligible for a non-deductible IRA. Married taxpayers with AGI less than $160,000, may be eligible for a Roth or deductible IRA.
As a prod, they've now given us five IRAs: the traditional, deductible IRA; the non-deductible IRA; the rollover IRA; the Roth IRA; and the Education IRA.
* Your Traditional account has been open for a short period of time and most of the balance is comprised of non-deductible contributions: Since there is little growth in your current IRA and since no taxes are owed on non-deductible IRA contributions, your tax liability will be low at conversion because taxes are only paid on the growth funds and on the deductible contributions.
To do this, the corrected nondeductible contribution amount should be added to Form 8606, Non-deductible IRA Contributions, IRA Basis and Nontaxable IRA Distributions, and attached to form 1040X.
Furthermore, the taxpayer must file Form 8606 to report a non-deductible IRA contribution for each tax year a contribution is made, regardless of whether a tax return is filed.
Individuals not eligible to make deductible contributions can make non-deductible IRA contributions, and the earnings on the investments are not subject to taxation until the funds are withdrawn.
Clients need advice about investing in non-deductible IRAs. There are alternative investments that defer the taxes, but allow easier access to the funds.
Articles in the recent past have explained the new tax laws regarding IRAs and investigated the question of whether a taxpayer should make a non-deductible IRA contribution.
Of the deductible IRAs, the most common is the Traditional IRA; of the non-deductible IRAs, the most well known if the Roth IRA.
Full browser ?