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All earnings of your traditional IRA remain tax-deferred until you make withdrawals, which are taxed as ordinary income during the tax year of their withdrawal. The deductibility of your contribution is based on IRS guidelines.
A Roth IRA is a non-deductible retirement account that features tax-free withdrawals for certain distribution reasons after five years. To qualify for a Roth IRA, you must have earned income (or your spouse must have earned income). You may contribute any amount up to 100 percent of your compensation or $6,000 (whichever is less) in 2019, as long as your Modified Adjusted Gross Income is within the limits established by the government. (There is an additional $1,000 allowed for those more than 50 years old.)
