IRA Selector Tool

1 You need to make certain adjustments to your AGI to compute your MAGI if any of the following circumstances apply to you:
  • if you (1) have income from U.S. Savings Bonds that was used for qualified higher education expenses, (2) received employer-paid adoption assistance or (3) have income earned while living abroad, you will need to add back such amounts to your reported AGI if they were treated as non-taxable amounts on your tax return; and
  • if you reported a deduction on your tax return for (1) domestic production activities, (2) interest paid on education loans, or (3) qualified tuition and related expenses, you will need to add back such amounts to your reported AGI to compute your MAGI for purposes of determining your eligibility to deduct contributions to a traditional IRA; or your eligibility to make contributions to a Roth IRA.
2 Account application subject to account opening qualification.

3 There is a single, 5 year holding period when determining whether earnings can be withdrawn federally tax-free as part of a qualified distribution from a Roth IRA. This period begins January 1 of the year of the first contribution to any Roth IRA account.

4 With inherited IRAs, beneficiaries must begin taking distributions within certain periods specified by the tax laws.

5 Dollar amount assumes no other contribution, other than a qualifying rollover contribution, to any other IRA. Please consult your outside tax advisor if your circumstances differ.

6 For purposes of calculating the amount of IRA contributions and deductions you are eligible for, we have assumed your yearly compensation to be equal to your MAGI. Please consult your outside tax advisor if your circumstances differ.

Any information presented about tax considerations affecting your financial transactions or arrangements is not intended as tax advice and cannot be relied on to avoid any tax penalties. Neither Merrill Edge™ nor its Financial Solutions Advisors provide tax, accounting or legal advice.

7 However, any earnings would be subject to tax if not taken in a qualified withdrawal and, if taken prior to attaining age 59 1/2, the earnings would be subject to a 10% early withdrawal additional tax, unless an exception applies.

8 Once you reach age 70½, the IRS requires you to withdraw a minimum amount each year from certain IRAs. These withdrawals are called required minimum distributions or RMDs. You must withdraw your RMD each year by December 31. However, if you're taking your RMD for the first time, you have until April 1 the year after you turn 70½ to make your withdrawal. If you elect to take your first distribution by April 1 of the following year, you will be required to take another distribution during that year as well. Rules governing RMDs can be complex, so be sure to discuss your distribution with a tax advisor.