An individual retirement arrangement (IRA) is a personal savings
plan that offers you tax advantages to set aside money for your
retirement or, in some plans, for certain education expenses. Two
advantages of an IRA are:
- You may be able to deduct your contributions in whole or in
part, depending on the type of IRA and your circumstances, and
- Generally, amounts in your IRA, including earnings and
gains, are not taxed until distributed, or, in some cases, are not
taxed at all if distributed according to the rules.
Chapter 1
discusses the rules for traditional IRAs (those that are
not Roth, SIMPLE, or education IRAs). Chapter 2
discusses the Roth
IRA, which features nondeductible contributions and tax-free
distributions. Chapter 3
discusses the education IRA, which can be set
up to finance higher education expenses. Chapter 4
discusses
simplified employee pensions (SEPs) under which IRAs can be set up to
receive contributions from employers under SEP plans. Chapter 5
discusses SIMPLE IRAs, which are IRAs set up to receive employer
contributions under a savings incentive match plan for employees
(SIMPLE).
This publication explains the rules for setting up an IRA,
contributing to it, transferring money or property to and from it,
making withdrawals from it, and receiving distributions from it.
Penalties for breaking the rules are also explained. Worksheets,
sample forms, and tables, listed under Appendices in the
contents, are included to help you comply with the rules. These
appendices are at the back of this publication.
Comments and suggestions.
We welcome your comments about this publication and your
suggestions for future editions.
You can e-mail us while visiting our web site at
www.irs.gov/help/email2.html.
You can write to us at the following address:
Internal Revenue Service
Technical Publications Branch
W:CAR:MP:FP:P
1111 Constitution Ave. NW
Washington, DC 20224
We respond to many letters by telephone. Therefore, it would be
helpful if you would include your daytime phone number, including the
area code, in your correspondence.
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