Traditional IRA Accounts | Plan Your Retirement with Merrill Edge traditional-ira
A Traditional IRA offers the potential for tax-deductible contributions.
Tax-advantaged growth

Contributions and earnings from a traditional IRA grow tax-deferred until withdrawn at which time they are taxed at your current rate.(If contributions are not tax-deductible, then they can be withdrawn tax-free under a pro-rata rule.) If withdrawals occur before you are age 59 ½ then you also may be subject to a 10% additional tax.

Contributions may be fully tax-deductible if any of the following apply:

  • Neither you nor your spouse is an active participant in an employer-sponsored retirement plan
  • You participate in an employer-sponsored retirement plan and your 2011 or 2012 MAGI is $56,000 ( $58,000 for 2012) or less as a single taxpayer or $90,000 ($92,000 for 2012) or less as married taxpayers filing jointly
  • You do not participate in an employer-sponsored retirement plan, but your spouse does, and joint MAGI is no more than $169,000 for 2011($173,000 for 2012)
Contributions
  • If you are under age 50 you can contribute up to $5,000 for each of 2011 and 2012
  • For each year during which you are age 50 or older, you can make an additional $1,000 contribution
  • 2011 contribution deadline
    April 17, 2012 (Tuesday)
Traditional IRA Tax Deduction Guidelines
Tax Deductibility of Traditional IRA Contributions
Tax deductibility of your Traditional IRA contribution is based on several factors:
  • Your federal tax filing status
  • Your modified adjusted gross income
  • Whether you or your spouse participates in an employer-sponsored retirement plan such as 401(k), 403(b) or pension.
  • Your age
See the chart below for guidelines.
Eligibility

Anyone under age 70 ½ who has earned income equal to or greater than their IRA contribution amount.

  • If you contribute to an employer-sponsored plan like a 401(k) or 403(b), you are still eligible to contribute to a Traditional IRA account
  • If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, you can contribute to a Traditional IRA account
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Tax Deductibility of Traditional IRA
for participants in employer-sponsored retirement plans
If your Modified Adjusted Gross Income
and filing status is:		 You can deduct this much of your contribution
Single Filers MARRIED FILING JOINTLY Under
Age 50		 Age 50
and Over
You Participate in an Employer Retirement
Plan		 Only your Spouse
Participates in an Employer Retirement
Plan
$56,000 & under $90,000 & under $169,000 & under $5,000 $6,000
$57,000 $92,000 $170,000 $4,500 $5,400
$58,000 $94,000 $171,000 $4,000 $4,800
$60,000 $98,000 $172,000 $3,500 $4,200
$60,000 $98,000 $173,000 $3,000 $3,600
$61,000 $100,000 $174,000 $2,500 $3,000
$62,000 $102,000 $175,000 $2,000 $2,400
$63,000 $104,000 $176,000 $1,500 $1,800
$64,000 $106,000 $177,000 $1,000 $1,200
$65,000 $108,000 $178,000 $500 $600
$66,000 & over $110,000 & over $179,000 & over $0 $0
If your Modified Adjusted Gross Income
and filing status are:		 You can deduct this much of your contribution
Single Filers MARRIED FILING JOINTLY Under
Age 50		 Age 50
and Over
You Participate in an Employer Retirement
Plan		 Only your Spouse
Participates in an Employer Retirement
Plan
$58,000 & under $92,000 & under $173,000 & under $5,000 $6,000
$59,000 $94,000 $174,000 $4,500 $5,400
$60,000 $96,000 $175,000 $4,000 $4,800
$61,000 $98,000 $176,000 $3,500 $4,200
$62,000 $100,000 $177,000 $3,000 $3,600
$63,000 $102,000 $178,000 $2,500 $3,000
$64,000 $104,000 $179,000 $2,000 $2,400
$65,000 $106,000 $180,000 $1,500 $1,800
$66,000 $108,000 $181,000 $1,000 $1,200
$67,000 $110,000 $182,000 $500 $600
$68,000 & over $112,000 & over $183,000 & over $0 $0

Additional Considerations:

If neither you nor your spouse participates in an employer-sponsored retirement plan, your Traditional IRA contribution may be fully deductible.
Married Filing Separately - If you are Married, Filing Separately and your AGI is greater than $10,000, you may not be eligible to deduct your contribution to a Traditional IRA.
You may contribute simultaneously to a Traditional IRA and a Roth IRA (subject to eligibility) as long as the total contributed to all (Traditional and/or Roth) IRAs equals no more than the contribution limits listed above for the year of contribution.
Please see IRS Publication 590 at www.irs.gov for further details regarding Roth IRA contribution limits and guidelines.
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Roth IRA Conversion
A Roth IRA tax law changed in 2010.
Could it benefit you?
It may be a good time to consider converting your Traditional IRA to a Roth IRA.
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1 Certain restrictions apply. No annual IRA custodial fee for Self-Directed accounts with Merrill Edge will be charged for the life of the account for existing and prospective clients who deposit or transfer $250 or more to a traditional IRA, rollover IRA, or Roth IRA. If the client falls beneath that asset level, a fee will be charged.

No annual IRA custodial fee for accounts with the Merrill Edge Advisory Center will be charged for the life of the account for existing and prospective clients who deposit or transfer $5,000 or more to a traditional IRA, rollover IRA, or Roth IRA, and keep the assets there for one full year. Deposits must be made to a single account before December 31, 2011 to qualify for the free for life offer. Deposit must remain in account for one year from the date of deposit to qualify for the fee waiver. Free for Life means no custodial fee, up to a $50 fee for the life of the account. All other fees still apply. Accounts not qualifying for the free for life promotion will be charged an annual custodial fee with a minimum of $50 and a maximum of $100.

Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Neither Merrill Edge nor its Financial Solutions Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.