No setup, administration or annual maintenance fees are charged on Star One IRA and ESA Accounts.
Traditional IRA Account | Roth IRA Account | Coverdell Education Savings Account (ESA) | |
---|---|---|---|
Qualifications: | Must have earned income. There are no age restrictions. (effective 1/1/2020 SECURE Act) | 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, 2021-22: |
$6,000, plus $1,000 "catch-up" contribution (if age 50 or over during the year) |
$6,000, plus $1,000 "catch-up" contribution (if age 50 or over during the year) |
$2,000 per beneficiary (ESA contributions do not count against IRA contribution limits) |
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 |
Nonrefundable Tax Credit: | Up to $2000 for certain individuals—income requirements apply | Up to $2000 for certain individuals—income requirements apply | Not applicable |
Contribution Restrictions: | None if you have earned income (effective 1/1/2020 SECURE Act). However, if you are an active participant in an employer retirement plan, your contribution may not be deductible (See tax-deduction section below). |
Yes, 2022 contributions phase out between $129,000 - $144,000 for singles and $204,000 - $214,000 for married couples. Married filing separate phase out: $0 - $10,000. Yes, 2021 contributions phase out between $125,000 - $140,000 for singles and $198,000 - $208,000 for married couples. Married filing separate phase out: $0 - $10,000. |
Yes, 2021- 2022 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 ½ - Death or disability - Qualified medical expenses - Certain health insurance - Qualified college expenses - 1st time home purchase (up to $10,000) - Due to IRS levy - Birth or adoption of a child (effective 1/1/2020 SECURE Act) |
None if: - Over 59 ½ - Death or disability - Qualified medical expenses - Certain health insurance - Qualified college expenses - 1st time home purchase (up to $10,000) - Due to IRS levy - Birth or adoption of a child (effective 1/1/2020 SECURE Act) |
None if: - For payment of qualified education expenses |
Required Distributions: | Under the SECURE Act effective 1/1/2020, must begin by April 1 following year participant turns 72 | Only after death of the participant | Must be completed 30 days after beneficiary reaches age 30 (except for special needs children) or death |
Contribution Age Limit: | Under the SECURE Act effective 1/1/2020, there is no age limit | None | Not allowed after attaining age 18 except for special needs children |
Please join us in this workshop presented by Star One Certified IRA Professionals to gain essential knowledge on IRAs which encompasses Cost of Living Adjustments (COLAs), eligibility, portability, distribution, tax reporting and beneficiary options. Participants will also learn how to avoid regulatory pitfalls by recognizing the features of IRAs and understanding the laws that govern them.
Contributions up to the limit are fully tax-deductible if you are not an active participant in an employer-sponsored retirement plan.
If you are an active participant and a single tax filer, your deductibility phase-out range for tax year 2022 is $68,000 - $78,000, up from $66,000 to $76,000 in 2021 .
If you are married and filing a joint return, your deductibility phase-out range for tax year 2022 is $109,000 - $129,000, up from $105,000 to $125,000 in 2021.
Note: For an IRA contributor who is not an active participant and is married to someone who is an active participant, the deductibility phase-out range is $204,000 - $214,000 for 2022 and $198,000 - $208,000 for 2021.
New legislation in 2020 brought flexibility in how you manage your Star One IRA.
Learn more about the CARES and SECURE Acts by selecting the links below:
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IRA Information and Help