The contribution limit for tax year 2008 & 2009 for both Traditional and Roth IRAs is $5,000. For either year, if you are age 50 (or turned age 50 in the year) you may make an additional $1,000
catch up contribution, for a total of $6,000 for 2008 and $6,000 for 2008.
Refund Option for IRAs. Taxpayers can split their refunds among up to three accounts held by up to three different U.S. financial institutions, such as banks, mutual funds, brokerage firms or credit unions. Beginning with the 2007 tax filing season, the IRS will allow you to direct (either in whole or in part) a tax refund to a Contributory IRA as an annual contribution. If you designate a refund as an IRA contribution on your tax return, contact Star One prior to filing your taxes. To qualify as a 2008 tax-year contribution, the deposit must be received by Star One no later than April 15, 2009.
To split their direct-deposit refunds among two or three different accounts or financial institutions, taxpayers should complete the new Form 8888, Direct Deposit of Refund to More Than One Account. Taxpayers can also continue to use the direct deposit line on Form 1040 to electronically send their refund to one account. See our rates page for information on Star One's investment options. Star One's Routing/Transit number is 321177968.
IRAs are more flexible than they've ever been. They're no longer considered strictly retirement savings tools because they can help you pay for college, a first-time home purchase and more. Star One offers competitive rates on Traditional IRAs, Roth IRAs and Coverdell Education Savings Accounts. Visit our comprehensive
Financial Road of Life section for complete information and online forms.
Service your existing Traditional, Roth, or Coverdell Education Savings Account. |
Star One's Unique IRA & ESA Features:
- Convenience of payroll allocations and automated deposits
- No setup, administration or annual maintenance fees
- Automatic distributions available
- 10 day grace period and automatic renewal on Certificate Accounts
- Competitive rates
- Knowledgeable, qualified staff
- Monthly statement
IRA & ESA Investment Options:
Traditional IRAs
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Contribute!
Your contributions are fully tax-deductible if you are not an active participant in an employer retirement plan (such as a 401(k)). Otherwise, phase out rules apply. Investments grow on a tax-deferred basis. Earnings are taxed only upon withdrawal. We offer Contributory, Rollover, Conduit and Spousal plans.
Take advantage now of incentives that IRA’s offer which include:
- Catch-up contributions allowed for individuals age 50 & over
Add an additional $1,000 over the maximum contribution limit (see below) until 2009. Maximum contributions from 2009 forward may be adjusted for inflation in $500 increments. No admustment was made for 2009.
- Nonrefundable tax credit available for certain individuals
You may be eligible to receive a credit on your contribution if you meet certain income requirements.
- Increased portability for your retirement savings
Untaxed Traditional IRA assets are now generally permitted to be rolled over into a qualified retirement plan (employer plan).
Roth IRAs
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Contribute!
Roth IRAs may offer greater tax savings and withdrawal flexibility than a Traditional IRA. While contributions are not tax deductible, contributions and earnings can be withdrawn tax-free on qualified distributions. Roth IRAs have no mandatory annual distribution requirements and you can contribute beyond age 70 1/2. Eligibility depends on income. Both Contributory and Conversion plans are available.
- Catch-up contributions allowed for individuals age 50 & over
Add an additional $1,000 over the maximum contribution limit (see below) until 2009. Maximum contributions from 2009 forward may be adjusted for inflation in $500 increments. No adjustment was made for 2009.
Education Savings Accounts
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Contribute!
Coverdell Education Savings Accounts (ESA’s) are an ideal way for you to begin saving money to help a child, grandchild or any young person pay for education expenses. Here are some of the benefits:
- Qualified expenses for K-12 school costs
This includes home computer equipment, Internet access and tutoring.
- Waiver of age limitations for children with special needs
The law allows contributions for individuals with special needs beyond age 18 and no mandatory pay-out at age 30.
| |
Traditional IRA |
Roth IRA |
Coverdell Education Savings Account |
| Qualifications |
Must have earned income and not have reached age 70 1/2 by the end of the year |
Must have earned income. There are no age restrictions |
The designated beneficiary must be an individual under the age of 18. The age 18 limitation will not apply to any designated beneficiary with special needs. |
| Maximum Contributions |
Taxable years beginning
2008 and after...$5,000
|
Taxable years beginning
2008 and after...$5,000 |
$2,000 per beneficiary. Contributions do not count against the limits for IRAs |
| Tax Status of Earnings |
Tax-deferred until withdrawal |
Earnings grow tax-deferred. Tax-free on qualified withdrawals |
Earnings grow tax-deferred. Tax-free on qualified withdrawals |
| Contribution Restrictions |
None if you are under age 70 1/2 and have earned income. However, if you are an active participant in an employer retirement plan your contribution may not be deductible (See tax deduction section below) |
Yes, contributions phase out between $101,000 - $116,000 for singles and $159,000 - $169,000 for married couples |
Yes, contributions phase out between $95,000 - $110,000 for single tax filers and $190,000 - $220,000 for joint tax filers |
| Tax Deduction |
Yes (See Traditional IRA Tax Deduction explanation chart below) |
No |
No |
| IRS Penalties for Early Withdrawal |
None if:
- Over 59 1/2
- Death or disability
- Qualified medical expenses
- Certain health insurance
- Qualified college expenses
- 1st time home purchase (up to $10,000)
- Due to IRS levy |
None if:
- Over 59 1/2
- Death or disability
- Qualified medical expenses
- Certain health insurance
- Qualified college expenses
- 1st time home purchase (up to $10,000)
- Due to IRS levy |
None if:
- For payment of qualified education expenses |
| Required Distributions |
Must begin by April 1 following year participant turns 70 1/2 |
Only after death of the participant |
Must be completed 30 days after beneficiary reaches age 30 (except for special needs child) or dies |
| Contribution Age Limit |
Not allowed after the year age 70 1/2 is attained |
None |
Not allowed after attaining age 18 except for special needs child |
| Traditional IRA Tax Deduction explanation: Contributions up to the limit are fully tax deductible if you are not an active participant in a retirement plan. If you are an active participant and a single tax filer your deductibility phase out range for tax year 2007 is $52,000 - $62,000, or if you are married and filing a joint return your deductibility phase out range is $83,000 - $103,000. Note: If your spouse is not an active participant, such spouse is subject to a separate deductibility phase out range of $156,000 - $166,000 for 2007. |
For more information, call our IRA Specialists at (408) 543-5202 or (866) 543-5202. See our IRA Account Disclosure for more details.
Note: The information provided is not intended as tax advice. Consult a tax professional regarding your individual circumstances. We suggest you consult with a tax advisor to find the best option for you.
Insurance
Traditional and Roth IRA Accounts are separately insured to $250,000 by the National Credit Union Administration, an agency of the United States Government. Coverdell Education Savings Accounts are insured under the same provisions as irrevocable trust accounts.
