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IRA Contributions and Tax Law Changes
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More terms, rates & disclosures
Experts agree that it's smart to save on your own to supplement your retirement
income. An IRA offers an excellent means to save for your retirement. NCUA, the
federal agency that insures credit union deposits, recently increased the insured
amount of IRAs to $250,000! (Other deposit accounts are also insured up to $250,000.)
Tax Year 2006
The contribution limit for combined contributions to Roth and Traditional IRAs is
$4,000, and anyone age 50 or over can contribute $5,000. If you're contributing
between January 1 and April 16 and want to use this contribution for the 2006 tax
year, be sure to make this designation in writing.
Tax Year 2007
The contribution limits remain the same for tax year 2007. Feel free to make prior
year (2006) and current year contributions at the same time. You’ll start earning
dividends on both your 2006 and 2007 contributions.
New: Tax-Free Distributions to Charities
Individuals age 70 1/2 or older can now make tax-free IRA distributions directly
to a charitable organization. This includes donating the Required Minimum Distribution,
resulting in no taxable distribution. This applies to distributions made through
Dec. 31, 2007 and is limited to $100,000 or less.