The Roth IRA, first established for the 1998 tax year, allows annual contributions of up to $5,000. Account Holders who are age 50 or older may contribute an additional catch up contribution. Individuals may contribute only if their modified AGI does not exceed levels established by the government.

The distinguishing feature of a Roth IRA is that the earnings accrue tax deferred and are potentially tax-free at the time of distribution. Contributions to a Roth IRA are not deducible.

The Roth IRA is more accessible than the Traditional IRA in that individuals may take a distribution of their principal amount at any time and for any reason without penalty.

Quick Facts - Roth IRA

Contributions
Minimum / Maximum Age to Contribute	None
Maximum Contribution: Maximum 2009 Contribution Age 50+ Maximum 2010 Contribution Age 50+	As follows: $5,000 $6,000 $5,000 $6,000
Income Maximum - regular contributions: Filing Single Filing Joint Married, filing separate	As follows: $105,000 - $120,000 (MAGI) $166,000 - $176,000 (MAGI) $0 - $10,000 (MAGI)
Income Maximum-conversion contributions: Filing Single Filing Joint Married, filing separate	As follows: $100,000 (MAGI) $100,000 (MAGI) No conversion allowed
Distributions
5 year waiting period AND 59 1/2, Death, Disability OR First Time Homebuyer	Qualified Distribution - Tax and Penalty Free
Ordering Rules for Non-Qualified Distributions - What is distributed first?	1. Contributions 2. Conversions - taxable portion 3. Conversions - nontaxable portion 4. Earnings
Annual Contributions	Always Tax and Penalty Free
Conversions - taxable portion: Under 59 1/2 59 1/2 +	As follows: Years 1-5 = 10% penalty Years 6+ = No penalty No penalty
Conversions - nontaxable portion	No Penalty
Nonqualified Distribution of Earnings	Subject to tax and 10% early distribution penalty, if applicable

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