Summary Table of Traditional IRA and Roth IRA Tax Rules

Summary Table of Traditional IRA and Roth IRA Tax Rules

For your convenience, The Skilled Investor has provided a detailed table that summarizes 2007 rules for traditional IRAs and Roth IRAs.

Because this table has 13 columns and 20 rows, it is too large to be displayed properly in a blog posting. To view this table and read the accompanying article, follow this link to The Skilled Investor’s main website:

Summary Table of Traditional IRA and Roth IRA Tax Rules

The table has a left-hand column of questions and 12 columns of information. Read the first four questions in the first four rows to determine which of the twelve columns would apply to you. First, choose the “single” or “married, filing jointly” tax filing columns that apply to you. Next, determine whether or not you (and your spouse, if married) are covered by a retirement plan at work. (Read footnote 1.)

Once you have done this, you should have found one “traditional IRA” column and one “Roth IRA” column that would apply to you. Keep track of these two columns and ignore the others. Then, read the remaining questions further down the table to compare the various traditional IRA and Roth IRA rules that affect you. Be careful to distinguish between the rules about whether you can make a contribution and whether an allowable contribution is tax deductible.

Fun huh? The tax rules for traditional and Roth IRAs are very complex, and anyone could easy become confused by these rules. A careful reading of the 104 page IRS Publication 590, “Individual Retirement Arrangements (IRAs)” would make anyone’s head hurt.

You should consult IRS Publication 590 and/or a tax professional to confirm this information, before you make a personal finance decision about an individual retirement account.

For more of The Skilled Investor’s commentary on the complexity of US retirement account tax laws, see: “Commentary — the labyrinth of tax-advantaged plan rules.”

Related Personal Finance Reading:

Personal Finance: Turning Money into Wealth (5th Edition) (MyFinanceLab Series)

IRS guidance on failed Roth IRA conversion.: An article from: The Tax Adviser

Most IRAs are not covered by wills or living trusts. (Focus: Banking and Finance).(estate planning and individual retirement accounts): An article from: Fairfield County Business Journal

Stand Up to the IRS

New Roth IRA expands tax-free earnings. (Roth Individual Retirement Account which resulted from the Taxpayer Relief Act of 1997 sponsored by Arkansas Rep. ... Jr.): An article from: Arkansas Business

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