Open Roth Ira – What is a Roth IRA and Why Should You Care?
by J.D. Roth 
An IRA is an Individual Retirement Arrangement, though it’s more commonly called an Individual Retirement Account. An IRA is simply a holding account. It’s a label. When you open roth Ira, it contains nothing. Like a bucket, it’s a place for you to put things.
Open Roth Ira - The things you place in your bucket are investments. You might, for example, buy stock through your retirement account. Or maybe government bonds. Some people use their IRAs to buy real estate. And some simply let their cash sit there, earning interest, just as it would if it were deposited in the bank down the street. (Last night I spoke with a friend who had his IRA funds sitting in a savings account, and only yesterday moved the money to an index fund!)

Open Roth Ira - Individual Retirement Accounts

Smart people mix things up over time. Their buckets may contain a combination of stocks, mutual funds, bonds, and real estate. But they don’t have to. Your IRA can contain a single index fund, if that’s what you want. An IRA is not an investment — it’s a place to put investments.

Open Roth Ira - Types of IRAs

Open Roth Ira - When you use a non-retirement account, you invest post-tax money. Depending on how you invest, you may also be taxed on dividends and capital gains along the way. You’ll also be taxed on the earnings when you sell your investment. An IRA avoids one set of taxes, allowing your money to compound more quickly. The two types of IRAs that you should know about are “traditional” IRAs and Roth IRAs.

Open Roth Ira - With a traditional IRA, the money you invest is probably tax deductible, but the money you pull out at retirement will be taxed at the then-current rate. You don’t get a tax deduction on the money you contribute to a Roth IRA, but at retirement, earnings can be withdrawn tax-free. Put another way: money in a Roth IRA is taxed at the front end, money in a traditional IRA is taxed at the back end. Unless you earn a lot of money, a Roth IRA is probably ideal for most people reading this site. The rest of this article deals specifically with Roths.

Open Roth Ira - Roth IRA Rules and Requirements

Open Roth Ira - Not everyone qualifies to contribute to a Roth IRA. If your tax filing status is single and you earn more than $95,000, your contributions are restricted. If you are married filing jointly, your contributions are limited if your household income is more than $150,000. Moneychimp explains:

IRAs were created to encourage people to save for their retirement, by offering them a significant tax break. They are intended for ordinary working people — not, for example, the wealthy (income limits prevent them from participating), or trust fund kids too lazy to get a job (contributions have to be made from salary, not from investments or other income).

Check out Moneychimp’s Roth IRA contribution limit calculator to see if you qualify. (The calculator is a little buggy — be sure to start at the top and re-select all parameters if you make any changes.)

Other important facts:

• Open Roth Ira - If you are not yet 50 years old, you may only contribute $4,000 to your IRA in 2007 — if you’re older, you may contribute $5,000. (If you go over limit, you are fined on the excess amount. I’m unclear as to whether the rest of the excess can then remain in the account.)
• Open Roth Ira - To invest in a Roth IRA in any given year, you (or your spouse) must have earned income. (In other words, you can’t contribute to a Roth if all of your money came from an inheritance during a particular year.)
• Open Roth Ira - You can use a Roth IRA even if you have a 401k or other retirement plan.
• Open Roth Ira - You must make your contributions by the tax deadline each year.
• Open Roth Ira - Reinvestment of dividends and distributions are not counted against your contribution limit.
• Open Roth Ira - You can invest in almost anything you want. (Some things — such as life insurance or collectibles — are off-limits.)
• Open Roth Ira - You may withdraw your contributions at any time without penalty. If you attempt to withdraw your earnings before the age of 59-1/2, they will be subject to taxes and a 10% early withdrawal penalty (except in special circumstances).
• Open Roth Ira - Also – and this is a big one for many people -you may withdraw up to $10,000 in earnings without penalty in order to buy your first home.

There are other arcane guidelines and provisions, but these are the basics.

Where to open an IRA
Open Roth Ira - There are many places to open retirement accounts. Each has advantages and disadvantages. Many banks and credit unions offer IRAs, but they may only allow the money to be used for certificates of deposit or money market accounts. Big-name mutual fund companies like Vanguard are great places to Open Roth Ira, but they often require a minimum initial investment of several thousand dollars and provide a limited universe of investment choices. Discount brokerages like Sharebuilder and E*trade allow new investors to begin saving for retirement with no minimums, but their fees may be higher.

Open Roth Ira - There’s no one right place to open an account. You will need to search for a place that is good for you. (I’ll explore some options in part two of this series.) Questions to ask during your research include:

• Open Roth Ira - Is there a minimum initial investment?
• Open Roth Ira - What sorts of fees are assessed to the account?
• Open Roth Ira – Does the company offer automatic contributions? What are the limits?
• Open Roth Ira - What investment options are available? Can you invest in stocks? Mutual funds? Real estate?
• Open Roth Ira - Is it possible to download statements automatically into Quicken?

Open Roth Ira - Remember: the perfect is the enemy of the good. It’s far better to Open Roth Ira now through anyprovider than it is to delay because you’re worried about finding the number-one best place. Do some research. When you find a place that meets your requirements,Open Roth Ira. Don’t fuss and fret, worrying whether or not it’s the best choice. Find a good choice and go with it.

Find more about this Open Roth Ira articel from :

http://www.getrichslowly.org/blog/2007/06/05/what-is-a-roth-ira-and-why-should-you-care/

or just click Open Roth Ira to go there.

Open Roth Ira – Roth IRA rules
By Kay Bell • Bankrate.com

Retirement accounts get added attention during tax-filing season. That’s because you must put money in an individual retirement account no later than the April return-filing deadline. It doesn’t matter whether your contribution is to a traditional IRA (tax-deductible or nondeductible) or Roth Ira.
Open Roth Ira - If you opt for a Roth account, you won’t get an immediate tax break, but you won’t pay any tax on your money when you eventually take it out. The Internal Revenue Service, however, has specific rules on just who can have a Roth IRA and how much money can be contributed each year.

1. Open Roth Ira - Contribution limits

Open Roth Ira - In general, Roth contributions are the same as traditional IRAs. Last year, you were able to contribute up to $4,000. The maximum annual contribution stays at that amount this year. If you were 50 or older last year, you could have put in an extra $1,000. That catch-up contribution amount remains the same for 2007. However, you can’t put more in any IRA than you make. So if your income is only $1,500, then $1,500 is the most you can contribute to a Roth.

2. Open Roth Ira - Income

Open Roth Ira - Speaking of income, you must earn money to open any IRA. That means your only income can’t be from unearned sources, such as investments. You must get paid wages, a salary, tips, professional fees or bonuses. There is an exception that allows Roth accounts for nonworking spouses. If you and your spouse file a joint return but one does not work, the employed spouse can open and contribute to a Roth IRA for the unemployed partner.

Open Roth Ira - Generally, the contribution limits for a spousal IRA are the same as for the account held by the working wife or husband. Check Chapter 2 of IRS Publication 590, Individual Retirement Arrangements for complete guidelines on opening a Roth spousal IRA.
Open Roth Ira - But if you make too much money, you’re not eligible to open a Roth or to contribute to the account you opened when you were earning less. For a Roth, your earned income (with some deductions you might have taken, such as for student loan interest, added back in), must be less than:

• $160,000 if you’re married filing jointly
• $110,000 if you file as single, head of household, or married filing separately and did not live with your spouse during the year
• $10,000 if you lived with your spouse at any time during the tax year but decide to file separately.

And even if you’re not quite at the top of these pay ranges, your Roth contribution could be limited if your modified adjusted gross income falls within these limits:

• $150,000 to $160,000 for married couples filing jointly
• $95,000 to $110,000 for single or head-of-household taxpayers or married couples filing separately and who did not live with their spouse
• $0 to $10,000 for married couples filing separately who lived together at any time during the tax year.

Open Roth Ira – You still can add to your Roth in these cases, but not the full allowable amount. Publication 590 contains work sheets and examples to help you determine your reduced Roth IRA contribution amount.

3. Open Roth Ira - Age

Open Roth Ira - There is no age limit for Roth accounts. Whereas traditional IRA contributions are barred for individuals older than 70½, you can be any age and still contribute to a Roth IRA. And you can leave money in your Roth for as long as you live. The IRS doesn’t require minimum distributions from Roth’s as it does with traditional IRAs.

Open Roth Ira - If you find a Roth is the right IRA for you, you’ve got until the tax-filing deadline (which falls on April 17 this year) to open one or contribute to your existing account and have it count toward the prior year’s limit. After that, the money will be counted as a contribution in the next filing season.

Find more about this Open Roth Ira articel from :
http://www.bankrate.com/brm/itax/tips/20020328a.asp or just click Open Roth Ira to go there.