TRADITIONAL IRAs

Eligibility

Anyone under age 70 ½ who has annual compensation or who files jointly with a spouse with earned income.

Contributions

Total of all IRA contributions cannot exceed $5,000 or 100% of annual compensation, whichever is less.

Additional catch-up contributions are available for ages 50 and above.

Tax Benefits

Certain contributions are tax deductible.

Withdrawals

  • At or after age 59 ½ without penalty
  • Must begin withdrawals at age 70 ½

return to top


ROTH IRAs

Eligibility

Available to anyone, regardless of age, who has annual compensation, and qualifies for the individual's modified adjusted gross income (MAGI) levels, determined by his/her federal income tax return filing status.

Contributions

Total of all IRA contributions cannot exceed $5,000 or 100% of annual compensation, whichever is less.

Additional catch-up contributions are available for ages 50 and above.

Tax Benefits

Contributions are not tax deductible, but certain distributions are tax-free.

Withdrawals

  • Withdrawals of contributory principal are always tax-free and IRS penalty free
  • Interest distributions are tax-free for qualified withdrawals
  • No withdrawals are required at age 70 ½

return to top


EDUCATION IRAs

Eligibility

Each child under age 18 can have contributions made to a single account or multiple accounts designed to benefit the child. 

Contributions

Total of all after-tax contributions cannot exceed $2,000 per year.

Tax Benefits

Contributions and their subsequent earnings are tax-free when withdrawn to pay for a child’s education expenses.

Withdrawals

Tax-free withdrawals can be made for college, secondary and elementary school expenses.  These expenses include:

  • Tuition
  • Fees
  • Books
  • Academic tutoring
  • Special needs services in the case of a special needs beneficiary
  • Expenses for room and board, uniforms, and transportation

return to top


Farmers State Bank
Markesan, Wisconsin
 
NOTICE: Farmers State Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the web sites that have links here. Please contact us with any concerns or comments.