IRAs
Traditional and Roth IRAs And Coverdell Education Accounts
In 2001, new Tax Laws changed IRA contributions. The annual
$2,000 contribution limit for Traditional and Roth IRAs will increase
progressively through 2008. Review the contribution limits here,
check our dividend rates, and call us to start increasing your
IRA savings.
If you have any questions on IRAs, please read one of the following
informational brochures.
(You will need Adobe Acrobat to view them, download here)
Traditional and Roth IRA Contributions
| Tax Year(s) |
Amount |
| 2001 |
$2,000 |
| 2002-2004 |
$3,000 |
| 2005-2007 |
$4,000 |
| 2008 |
$5,000 |
| 2009 |
$500 Increments† |
| †Indexed to inflation (cost of living) |
Eligible married couples filing jointly, including married couples
with earned income or a married taxpayer and non-taxpayer spouse
filing jointly can take advantage of the increases, doubling the
single taxpayer amounts.
Traditional IRA Income Eligibility
Individuals with earned income or alimony may contribute to a
Traditional IRA, including married couples with earned income
or a married taxpayer and non-taxpayer spouse filing jointly.
- Income from other sources, such as investment or inheritance,
does not qualify.
- Contributions cannot be made for the year you reach age 70
1/2 or after.
Roth IRA Income Eligibility
Individuals with earned income or alimony may contribute to a
Roth IRA, including married couples with earned income or a married
taxpayer and non-taxpayer spouse filing jointly.
- Income from other sources, such as investment or inheritance,
does not qualify.
- Singles with income up to $95,000, and married joint filers
with income up to $150,00 are eligible.
- Reduced contributions for higher incomes are allowed for single
filers up to $110,000 and $160,000 for joint filers.
Catch-Up Provision For Workers Age 50
Plus
There is a catch-up provision for eligible workers age 50 and
over. They can contribute an additional $500 annually in 2002
through 2005, and an additional $1,000 each year starting in 2006.
| Tax Year(s) |
New IRA Contribution Limit |
Catch-Up Limit |
| 2001 |
$2,000 |
$0 |
| 2002-2004 |
$3,000 |
$500 |
| 2005 |
$4,000 |
$500 |
| 2006-2007 |
$4,000 |
$1,000 |
| 2008+ |
$5,000 |
$1,000 |
Coverdell Education Accounts
Coverdell Education Accounts for children and grandchildren
in your family allow family members to contribute up to $2,000
a year beginning in 2002.
- In addition to college and trade schools, you are able to
pay qualified expenses for public or private elementary and
high schools.
- No contributions are allowed after the beneficiary reaches
age 18.
Coverdell Education Account Income Eligibility
Anyone related or not related to the beneficiary may contribute
to the combined maximum of $2,000 in the 2002 tax year. However,
their earned income must be less than $95,000 for singles and
$190,000 for joint filers.
Note: Your credit union does not provide tax, legal, or accounting
advice. Your eligibility and contribution increases depend on
a number of factors. Check with your tax advisor or financial
planner.
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