Comparison |
Traditional IRA |
Roth IRA |
Eligibility | Earned Income | Earned Income – Subject to Modified Adjusted Gross Income (MAGI) Limits |
Contributions Limits |
Lesser of 100% of earned income or $6,000 Aggregated with Roth IRA contribution If age 50 or older an additional $1,000 is permitted for a total of $7,000 |
Lesser of 100% of earned income or $6,000 Subject to MAGI limits Aggregated with traditional IRA contribution If age 50 or older an additional $1,000 is permitted for a total of $7,000 |
Deductible Contributions |
YES – Subject to MAGI Limits | NO |
Single Filers: MAGI Limits for 2022 |
$68,000 or less = full deduction $68,000 to $78,000 = partial deduction $78,000 or more = no deduction |
$129,000 or less = full contribution $129,000 to $144,000 = partial contribution $144,000 or more = no contribution |
Married / Joint Filers: MAGI Limits for 2022 |
$109,000 or less = full deduction $109,000 to $129,000 = partial deduction $129,000 or more = no deduction |
$204,000 or less = full contribution $204,000 to 214,000= partial contribution $214,000 or more = no contribution |
Married / Separate Filers: MAGI Limits for 2022 |
N/A = full deduction less than $10,000 = partial deduction $10,000 or more = no deduction |
N/A = full contribution less than $10,000 = partial contribution $10,000 or more = no contribution |
Tax-Deferred Earnings |
YES | YES |
Taxation Issues On Withdrawals |
Earnings and deductible contributions are taxable Nondeductible contributions are not taxed Withdrawals are a ratio of deductible and nondeductible amounts |
Earnings withdrawn for nonqualified reasons are taxable Contributions are not taxed when withdrawn Withdrawals are considered to be the return of contributions first, then earnings |
Age 72 Required Minimum Distributions |
YES | NO |