IRA & Education Savings Account Support

One of the immediate benefits of contributing to a Traditional IRA is a tax deduction you can receive on your income taxes. For 2020, you may receive a 100% deduction on your annual contribution if:

• You don't receive benefits under an employer's retirement plan, or (if you do)
• Your modified adjusted gross income is no more than $104,000-$124,000 if married and filing jointly or $65,000-$75,000 for single filers (these amounts are for 2020).

For 2021, you may receive a 100% deduction on your annual contribution if:

• You don't receive benefits under an employer's retirement plan, or (if you do)
• Your modified adjusted gross income is no more than $105,000-$125,000 if married and filing jointly or $66,000-$76,000 for single filers (these amounts are for 2021).

If you participate in an employer plan, IRA deductibility is gradually phased out above these income levels.

If you reach the age of 50 before the end of the taxable year, you may be eligible to contribute an additional catch-up contribution to your Traditional and/or Roth IRA.

IRA Catch-Up Contributions

Year	Amount
2006 and beyond	$1,000

• You can open and fund one without employer participation
• Contributions/earnings are tax-deferred until retirement¹
•  Depending on your plan participation and income, you may benefit from tax deductions
• Your funds are always available, generally not true of employer plans
• There's no minimum contribution

The deadline to contribute to a Traditional IRA for a particular tax year is generally April 15 of the following year. When this date occurs on a weekend or a legal holiday, the following business day becomes the deadline. Tax return extensions will not affect this deadline.

When you contribute to your IRA between January 1 and April 15 for the previous tax year, it's referred to as a "carryback contribution."

For tax year ending December 31, 2020, the deadline to contribute a carryback contribution is April 15, 2021.

A SEP is a type of retirement plan that allows an employer to contribute to employees' Traditional IRAs. SEP contributions are subject to different contribution limits than Traditional IRA contributions. Once the employer makes a SEP plan contribution to an IRA, the contribution becomes an IRA asset and is subject to all the regular IRA rules and regulations. There are several other benefits of SEP plans:

• Total SEP contributions cannot exceed $57,000 for 2020 and $58,000 for 2021
• Contributions made by the employer are always 100 percent vested
• SEP plans may make contributions on behalf of eligible participants at any age starting 2020.
• Because SEP plan contributions become the employee's IRA assets, these SEP IRA assets may generally be transferred in the same manner as IRA assets resulting from regular IRA contributions

Single tax filers may contribute up to the maximum allowable per year if their modified adjusted gross income (MAGI) is less than $124,000. If a single tax filer's MAGI is between $125,000 and $140,000, they may contribute a reduced amount adjusted for their income. Married couples filing jointly may each contribute up to the maximum allowable if their MAGI is less than $196,000. Contributions for joint filers are reduced for MAGI's between $198,000 and $208,000.

Roth IRA contributions may not be made by single tax filer's with MAGI of more than $139,000, or couples with MAGI of more than $206,000. Annual contribution limits increase as follows:

Contribution Limits

Year	Amount	Catch-up Amount (Ages 50+)
2019 and 2020	$6,000	$1,000*
2021	$6,000	$1,000*

*For a total combined contribution amount of $7,000

You may make tax-free and penalty-free withdrawals from your Roth IRA if you satisfy two conditions. First, your Roth IRA must have been open for a minimum of five years. Second, the withdrawal must be made because of the occurrence of one of the following events:

• Age 59 1/2
• Death
• Disability
• First home purchase

Distributions that meet the above requirements are referred to as "qualified distributions." While you may take distributions from your Roth IRA at any time, distributions which are not qualified distributions may be subject to taxes (and in some cases early distribution penalties) to the extent they exceed your aggregate contributions to Roth IRAs.

If you reach the age of 50 before the end of the taxable year, you may be eligible to contribute an additional catch-up contribution to your Traditional and/or Roth IRA.

IRA Catch-Up Contributions

Year	Amount
2006 and beyond	$1,000

The deadline to contribute to a Roth IRA for a particular tax year is generally April 15 of the following year. When this date occurs on a weekend or a legal holiday, the following business day becomes the deadline. Tax return extensions will not affect this deadline.

When you contribute to your IRA between January 1 and April 15 for the previous tax year, it's referred to as a "carryback contribution."

For tax year ending December 31, 2020, the deadline to contribute a carryback contribution is April 15, 2021.

The money you contribute to a Roth IRA has already been taxed. As long as you stay within the contribution guidelines, the principal amount is never subject to future taxes or penalties.

Roth IRA contributions grow tax-deferred. 1 If you do not withdraw any of the earnings until you have had the Roth IRA for at least five years and have a qualifying event, those tax-deferred earnings become tax-free.

Formerly known as an Education IRA, a Coverdell Education Savings Account is a tax advantaged investment account for future education expenses (elementary, secondary, or college).¹

Designated beneficiaries with special needs:

• Will be eligible to receive annual contributions after attaining age 18
• Will not have his or her Education Savings Account balance distributed within 30 days after attaining age 30
• Will be eligible to receive rollover contributions from qualified family members after attaining age 30
• Will be eligible to be named as a designated beneficiary to a qualified family member's Education Savings Account after attaining age 30

The deadline to contribute to a Coverdell Education Savings Account (ESA) for a particular tax year is generally April 15 of the following year. When this date occurs on a weekend or a legal holiday, the following business day becomes the deadline. Tax return extensions will not affect this deadline.

When you contribute to your IRA between January 1 and April 15 for the previous tax year, it's referred to as a "carryback contribution."

For 2020, the deadline to contribute a carryback contribution is April 15, 2020.

The annual per-designated-beneficiary contribution limit is $2,000.

Qualified education expenses include college expenses and certain elementary and secondary school expenses including:

• Tuition
• Fees
• Books
• Supplies
• Equipment
• Academic tutoring
• Special needs services
• Room and board expenses
• Uniforms
• Transportation
• Educational computer technology or equipment
• Internet access