Question by rainfingers: Why is there an upper income limit for contributing to a Roth IRA?
People over a certain income are not allowed to make any contributions to a Roth IRA. Why? Wouldn’t people with high income rather pay the taxes later anyway (as they would do with a traditional IRA)? In other words, doesn’t this rule just prohibit people from doing something they’d already rather not do?
Mrs. F: in addition to the upper income limit, there’s also a yearly contribution limit ($ 4000 this year). But Roth IRAs are still very, very, worth it! You can always put more money in next year, and the year after that, etc. Contribute the maximum, or as much as you can, every year; you’ll be glad later.

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Answer by Mrs F
That doesn’t sound right. We were thinking of getting one of those sometime in the winter, but we should be able to contribute all we want!

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Question by The Fervor King: Should I close my Roth IRA and will I face a penalty?
My wife’s parents opened a Roth IRA for her prior to us getting married. It has been opened around six months now. We are considering closing it to pay off her credit card and getting entirely debt free. Is there any sort of exception to the additional taxing on nonqualified disbursements that would apply to this situation? We have other investments in place, and this Roth IRA is really unnecessary. Any help would be greatly appreciated. Thanks.

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Answer by Steve D
Sorry, but unless you can show hardship, there are no exemptions and you will end up paying the 10% penalty.

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Question by alex: Can you find a skeptical article on Roth IRA vs Traditional IRA?
Most published articles paint a very favorable picture of Roth IRA versus the Traditional IRA (and other IRA-like plans). I have done my own analysis and I honestly think the Roth is a clever government scheme to collect more taxes, and under no circumstances have I been able to think up a scenario where the individual taxpayer/investor comes out ahead with a Roth. Can you point out any well-written article that supports my opinion?

Thanks
I am not looking to debate my findings. I just want to find people who agree.

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Answer by Tony
It might help if you post the analysis you did proving your theory.

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Question by Maximus4488: Is tax on an IRA distribution that is converted to a Roth considered unearned income?
Last tax year 2009, I chose to convert $ 5000 of my kids Traditional IRA to his Roth IRA. I understand that the $ 5000 will be taxable to him. However, is the taxable amount considered unearned income to him and now subject to”Kiddy Tax” ?

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Answer by the tax lady
Yes, it’s unearned income and subject to kiddie tax.

If it’s not on a w-2, it’s kiddie tax–that also includes IRAs, unemployment, etc.

He will have to file a form 1040 with an 8615 attached.

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Question by Mr.Ed: Is it smart to use my Roth IRA towards my morgage?
I have a nice down payment I’m putting on my first house, but wondered would it be smart to add in money from my Roth IRA? What is better in the long run. As of now I am planning on living in this house for a long period of time, but everyone knows that can change.

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Answer by Steph M
yes

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Question by Cindy16: How much I am allowed to contribute to my ROTH IRA as a married couple?
My husband and I currently have one ROTH IRA under my name.
I also have 401k at my job, and he has his 401 at his job.
I am wondering could he also contribute to an ROTH IRA?
If so, what is the limits for him?

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Answer by Scout
Depending on your age. If you are over 50, then you can contribute $ 6000 each as long as you have made at least $ 12,0000 in income. If you are under 50, then the max is $ 5,000 each.

Now if you make more than 166,000 as a couple, then those limits are less.

If you do make over $ 166,000 then I would make a trad ira contr and then convert to a roth.

If you do make over $ 166,000 I would always talk with a tax advisor on anything that you do, especially when it comes to roths.

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Question by what?: I am a college student, can I open roth IRA and start contributing?
I am a dependent in my twenties, studing in a community college. I am employed as a tutor in my CC. Can I start saving for my retirement? does ROTH IRA work for me? or is there a better option?

P.S. I can contribute $ 400 each month. Is that too little to qualify for a roth IRA?

P.S. also, will participate in a roth IRA affect my status to receive financial aid from government?

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Answer by shiprepairwoman
You can contribute up to your earned income capped at 5K,

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Question by Chris R: How does a Roth IRA get reported on my taxes?
I contributed about $ 600 to my Roth IRA in 2006. I don’t get taxed on that do I? I heard I get a refund for 15% of that or something. Can someone please clear that up for me. Also, if it matters, I’m self-employed.

Thanks!

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Answer by jseah114
Your contribution to a Roth IRA is with after tax dollars. This means that you do not get a deduction for the amount contributed. However, the money your contribution earns is tax free (not subject to tax) if you take the money out when you reach retirement age.

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Question by Why?: Where is the best place to open a ROTH IRA?
I’m 26.. I have $ 19000 in savings, $ 5000 in 401K and no credit card debt. I have a car loan $ 15000 which I intend to keep open just to keep a good credit history.

My problem is, I’m not really good with investing and I know very little with the investing lingo. Is Roth IRA the right way to go? If so, which brokerage company should I open it with? Also, any other tips regarding retirement planning.

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Answer by The Son of Rage and Love
As long as you understand that you cannot take out the money until age 59-1/2 without huge penalties then a Roth is a good choice. My favorite mutual fund company is American Century Investors. They have a wide variety of funds and great customer service. Vanguard is good as well, but their customer service isn’t that great (that is what you give up to get their lower fees).

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Question by Thomas D: How do I invest my money in a Roth IRA?
A friend told me that I should put my money in a Roth IRA for my future investments and retirement. I don’t know much about it and/or how to put my money into one but I am curious. I am a 17 year old emancipated minor in California who has a bank account already and a job.

Thanks for all the help in telling me what a Roth IRA is and how to put my money in one (if I even should) in advance.

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Answer by brad
I had opened an ira a few years back through my local brokerage. An ira is good for gains made and not paying the regular taxes on them. good for someone looking to retire with a nestegg. If you need access to the cash or may change your mind within a few years? Don’t get one. if you take out too soon under the rules, you will be charged the taxes. I’m not sure if 17 would be eligible either?

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