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| Dave Rathbun |
 Posted: Sat Feb 11, 2006 9:38 am Post subject: |
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CFO
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Trades within an IRA are not taxed at the time of the trade.
Funds withdrawn from a Roth IRA are not taxed as they were taxed prior to being deposited.
Funds withdrawn from a "regular" IRA are taxed on withdrawal because they were not taxed prior to being deposited.
So if you start with $10K in an IRA and it grows to $50K, then you have a 40K tax-free gain in a Roth IRA because you paid taxes on the $10K before it was put into the account. You have a $40K taxable gain that is taxed on withdrawal from a regular IRA because you haven't paid any taxes yet. That's why Roth IRA accounts are better for most folks. Exceptions apply, of course. |
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| geb9696 |
| Posted: Sat Feb 11, 2006 9:40 am Post subject: |
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Investing VP
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| Is there a limit of how much money can be put into a Roth IRA? |
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| frusnak |
| Posted: Sat Feb 11, 2006 11:12 am Post subject: |
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CFO
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| If you are under 50 years of age the limit is $4,000.00...over 50 and you can contribute $5,000.00. 401K plan limit is $15,000.00 plus $5,000.00 catch-up for 50+year olds...some plans may not allow this though. |
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| stockmarkettips |
| Posted: Sat Feb 11, 2006 11:57 am Post subject: |
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Investing Manager
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| Thanks Dave. Good info. So, if you actively trade a ROTH ira you don't need to save all the information like when you bought and sold a stock and at what price for tax purposes? That to me is the main thing that holds me back from actively trading. It's a pain to keep track of all your trades. But, if you don't have to keep track of that with a ROTH IRA, that interests me. |
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| Dave Rathbun |
| Posted: Sat Feb 11, 2006 3:19 pm Post subject: |
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CFO
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In my opinion, it's smart to keep those records anyway. Why?
Because Congress giveth, and Congress can taketh away.  Meaning that the rules may change before you retire, or during your retirement. |
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