How much can I contribute?

Up to $3,000. For 2004, the annual limit is $3,000 for individuals who will not reach 50 years of age by December 31, 2004, and $3,500 for individuals who will (minus any contribution to a Roth IRA).

Tax Deductible

Full deduction for individuals who are not active participants in an employer plan or who have earned income below earned income limits. Partial deductibility for active participants in earned income phase-out range and no deduction for active participants with earned income above the earned income limits.

Earned Income Limits for 2003: Single: $40,000 - $50,000 Married filing jointly: $60,000 - $70,000

Earned Income Limits for 2004: Single: $45,000 - $55,000 Married filing jointly: $65,000 - $75,000

Contributions

Anyone under age 70^1/2 in the contribution year, with earned income, regardless of income level. A contribution can also be made on behalf of a non-working spouse up to the individual contribution limit. If you made deductible contributions then the entire amount is tax-deferred. If you made non-deductible contributions, then earnings are tax-deffered.

Tax Advantages

Interest is tax-deferred. Contribution is potentially tax-deferred.

Qualified Withdrawals

Distributions on account of tax-deductible contributions are subject to ordinary income tax. If a distribution is made before age 59^1/2, the distribution is also subject to a 10% excise tax unless one of the following exceptions apply: the distribution is on account of your death or disability, is one in a series of substantially equal payments, or the distribution is used to pay for a first time home purchase, qualified higher educational expenses, pay certain medical expenses, pay medical insurance premiums while unemployed or to satisfy certain IRS tax liens.

Withdrawls are mandatory after age 70^1/2 in order to avoid a 50% excise tax.

"Look-back" Period

"Look-back" period available between January 1st and April 15th for 2003 tax year.

Are rollovers and transfers permitted?

You may roll over/transfer to and from other Traditional IRAs. You may also roll over to and from qualified employer-sponsored plans. You can also convert your Traditional IRA to a Roth IRA if your adjusted gross income is less than $100,000.

How much can I contribute?

Up to $3,000. For 2004, the annual limit is $3,000 for individuals who will not reach 50 years of age by December 31, 2004, and $3,500 for individuals who will (minus any contribution to a Traditional IRA).

Tax Deductible

Contributions are non-deductible.

Contributions

Individuals with earned income.

Single filer < $110,000 (subject to phase out $95,000-$110,000, over $110,000 no contribution allowed).

Married filing jointly < $160,000 (subject to phase out $150,000-$160,000, over $160,000 no contribution allowed).

Married filing single < $10,000 (subject to phase out between $0 and $10,000).

You may continue to make contributions after age 701/2 if you have earned income.

Tax Advantages

Tax-deferred investment growth if the account has been open and funded for five years and certain requirements are met.

Qualified Withdrawals

Qualified distributions are tax-free. A distribution is qualified if it is made after the account has been open for 5 years and made after you are age 59^1/2 or on account of your death, disability or for a first time home purchase. If a distribution is non qualified, the earnings portion of the distribution is subject to income tax. Also, a nonqualified distribution made before 59^1/2 is subject to a 10% excise tax unless an applicable exception applies such as the distribution is used for qualified higher education expenses or used to pay certain medical expenses (see the exceptions for a Traditional IRA).

"Look-back" period

"Look-back" period available between January 1st and April 15th for 2003 tax year.

Are rollovers and transfers permitted?

You may convert a Traditional IRA to a Roth IRA (if adjusted gross income is less than $100,000/married filing jointly). You may not roll over or transfer qualified retirement plan dollars to a Roth IRA.

How much can I contribute?

Up to $2,000. If additional accounts are established for a child, total contributions to all accounts must not exceed the total amount above.

Tax Deductible

Contributions are non-deductible.

Contibutions

Contributions can be made for anyone with earned income of less than $95,000 (single) or $190,000 (joint) to a fund for an individual under age 18 or an individual over 18 who has special education needs. Partial contributions may be made by individuals with earned income between $95,000 and $110,000 (single) or $190,000 and $220,000 (joint). No contribution may be made by individuals with earned income in excess of these limits.

Tax Advantages

Any growth of the account is tax-deferred. Withdrawals used for school expenses (elementary, secondary or college education) are tax-free.

Qualified Withdrawals

There is no withdrawal schedule. Money may be withdrawn tax-free as many times as necessary during the child's school years to pay for qualified higher education expenses*** and qualified elementary and secondary school expenses. If not withdrawn by age 30, there will be a penalty. Withdrawals used for expenses other than qualified education expenditures may be subject to a 10% penalty tax, as well as federal and state income taxes.

"Look-back" period

"Look-back" period available between January 1st and April 15th beginning with 2003 tax year.

Are rollovers and transfers permitted?

You may not roll over or transfer qualified retirement plan dollars to a Coverdell Education Savings Account. Except in the case of a beneficiary with special education needs, if an account is not used by the time the beneficiary reaches age 30, the account may be transferred to a sibling or child of the beneficiary. The account retains its tax-advantaged status and does not count towards the $2,000 annual contribution limit for the other child.

Description

A plan that allows you to make deductible contributions toward your own and your employees' retirement without getting involved in more complex retirement plans.

Tax Deductible

Employer contributions are tax deductible to the employer. Contributions are not taxable to an employee until withdrawn, and earnings in the account are tax deferred.

Contibution Limits *

Contributions made by an employer for a year for a common-law employee cannot exceed the lesser of $40,000 or 25% of the employee's compensation. For self-employed individuals certain adjustments must be made to income in determining the 25% limit.

Who may participate?

Any employee who is at least 21 years old and has performed "service" in at least three of the last five years must be permitted to participate under the SEP unless his or her total compensation is than $450 for the year.

Withdrawals

The Traditional IRA distribution rules apply. Thus, generally distributions are subject to ordinary income tax and if a distribution is made prior to age 59^1/2 the distribution is also subject to a 10% excise tax unless one of the exceptions listed in the Traditional IRA section apply.

Description

These plans are available to employers with less than 100 employees and who do not sponsor any other active retirement plan.

Contributions can be made either by a non-elective contribution, matching contribution or by salary reduction. Salary reduction is an agreement with the employee to have salary reduced each payroll period to be contributed by the employer to a SIMPLE IRA on behalf of the employee.

Tax Deductible

Employer contributions are tax deductible to the employer. Contributions are not taxable to an employee until withdrawn, and earnings in the account are tax deferred.

Contibution Limits *

The maximum salary reduction contribution that can be made on behalf of an employee is $8,000 for 2003 and $9,000 for 2004. For individuals who will reach age 50 within the applicable year the limit is $9,000 for 2003 and $10,500 for 2004.

The employer selects between matching employer contributions which cannot exceed 3% of the employee's compensation or nonelective contributions which cannot exceed 2% of an employee's compensation.

Who may participate?

Any employee who received at least $5,000 in compensation from the employer during any 2 years prior to the current year, and is reasonably expected to receive at least $5,000 in compensation during the calendar year for which contributions are made.

Withdrawals

If a withdrawal is made within the first two years and the individual is not age 59^1/2 the early withdrawal will be subject to income tax and a 25% penalty. Otherwise, the Traditional IRA distribution rules apply. Thus, generally distributions are subject to ordinary income tax and if a distribution is made prior to age 59^1/2 the distribution is also subject to a 10% excise tax unless one of the exceptions listed in the Traditional IRA section apply.

Description

Two different types of Keoghs are:

1. Money purchase plan: The employer contributes a certain percentage every year based on the amount selected in the plan document.
2. Profit sharing plan: The employer may have the flexibility to determine the contribution percentage each year. The employer may base the contibution on profits.

Tax Deductible

Employer contributions are tax deductible to the employer. Contributions are not taxable to an employee until withdrawn, and earnings in the account are tax deferred.

Contibution Limits *

Profit sharing plans can contribute between 0% and 25% and the employer may have the flexibility to determine the percentage each year. A money purchase plan can contribute a fixed percentage between 1% and 25% as selected by the employer in the plan document. The employer may only change the percentage by amending the money purchase plan.

Who may participate?

Full-time employees who receive compensation for at least 1,000 hours of work per year. Age and years of service requirements may apply.

Withdrawals

Your plan document designates how withdrawals occur. Some plans allow hardship withdrawals. Most plan withdrawal provisions are for death, disability, termination of service or plan termination.

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