What Are Roth IRAs and IRAs?

An IRA is an individual retirement account. There are two main types of IRAs, an IRA and a Roth IRA. Both allow you to save and invest money towards your retirement. You get to pick what stocks, mutual funds, bonds, etc. to invest in and how much money you wish to invest in each for both types of IRAs. The maximum contributions you can make annually to your retirement account is currently $6,000 if you are less than 50 years old or $7,000 if you are 50 years or older.

However, there are a few key differences between the two.

IRAs

A traditional IRA allows you to contribute money to your retirement. That money is non-taxable income during the year you contribute it. It will be taxed when you take the amount out when you retire at your tax rate at the time of retirement. All growth of your investments is tax-deferred.

Roth IRAs

Roth IRAs allow you to contribute towards your retirement at your current tax rate. You pay taxes on it now and when you withdraw it after the age of 59 and a half, it is tax-free income. Your money grows tax-free, you are free to invest it as you see fit, and this is a great option for individuals who expect to be in a higher tax bracket upon retirement.

Contact Our Income Tax Pros Today!

National Tax Service is a professional income tax returns service for the Columbia, SC community. Our tax professionals are available to discuss your tax options including IRAs and Roth IRAs. We will discuss ways with you to reduce your tax burden for your current year or to plan out your retirement. Contact us today to discuss your taxes!

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Easy Advance

*To be eligible for the $6,000 loan amount, your expected Federal refund less authorized fees must be at least $7,000. An Easy Advance (EA) is a loan secured by and paid back with your tax refund and is offered by Republic Bank & Trust Company, Member FDIC, to eligible taxpayers. Loan amount options are based on your expected Federal refund less authorized fees. If approved for an EA, a Finance Charge may apply. Loan is subject to underwriting and approval. EA proceeds are typically available within 24 hours of IRS acceptance of tax return or within 24 hours for those filing before the IRS start date; however, if direct deposit is selected, it may take additional time for your financial institution to post the funds to your account. Visit your tax preparer to learn about the cost and timing of all filing and product options. Available with preparation of 2022 federal tax return through Feb. 28, 2023.

Refund Transfer

**A Refund Transfer is a fee-based product offered by Republic Bank & Trust Company, Member FDIC. A Refund Transfer Fee and all other authorized amounts will be deducted from your tax refund. Visit your tax preparer to learn about all filing and product options, including obtaining your refund at no additional cost.

Roth IRA vs IRA