Individual Retirement Accounts
Roth IRA Allows Tax-free Withdrawal
The biggest news is this brand new Roth IRA. While initial investments are
not made with pre-tax dollars (as with a traditional IRA), they have the advantage of
being tax-free at withdrawal. This allows you to grow your retirement savings and withdraw
them at retirement with no federal taxes owed. You can also make withdrawals without federal taxes after
five years for first-time home purchases, regardless of your age! And they are available to some who
previously exceeded the income ceilings, and therefore could not take full advantage of this IRA option.
Education IRAs Are Now a Reality
They allow you to put away up to $500 per year for higher education expenses, earning interest tax-free and
withdrawing your investment, paying no federal taxes!
Traditional IRAs Expand
Eligibility for fully deductible IRAs will gradually expand starting in 1998. For example, by the year 2007, married
individuals will be eligible for a full deduction if their adjusted gross income (AGI) is $80,000 or less, twice as
much as in 1997!
There are many more changes you should know about -- changes that allow you to maximize your
savings...minimize your taxes...make the most of your retirement investment.
Calculating Your IRA Deduction
This section explains how a person determines what portion, if any, of their IRA contribution may be allowed as
a tax deduction for federal income tax purposes.
From 1982 to 1986, all contributions you made to your IRA were tax-deductible, as long as they were not more
than a certain amount each year. This is no longer true for many taxpayers who are covered by a retirement plan
at work. However, a nondeductible IRA contribution is allowed, and all its earnings are tax-deferred until
distributed to you. Most individuals would still benefit greatly by making a nondeductible IRA contribution.
Continue with Calculating Your IRA Deduction
FSNB offers IRAs with variable and fixed rates at competitive levels. Check with an FSNB counselor for
specific IRA information.
Frequently asked questions about IRA's
Business Savings Account - Your company can open a business savings account and earn competitive
Business Savings Certificate - You can choose from a variety of savings certificates with a range of
maturities to meet your needs.
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