800/607.0145 tollfree info@midatlanticira.com

Source: www.irs.gov

A Roth IRA is an account or annuity set up in the United States solely for the benefit of you or your beneficiaries. It is an individual retirement arrangement. However, it differs from traditional IRAs in that contributions are not deductible. For information on contributions and the limitations, refer here.

To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA.

Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. But, if you satisfy the requirements, qualified distributions are tax free. Contributions can be made to your Roth IRA after you reach age 70½ and you can leave amounts in your Roth IRA as long as you live.

What’s New for 2018

See 2018 Roth IRA Contributions.



Deemed IRAs. For plan years beginning after 2002, a qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. An employee’s account can be treated as a traditional IRA or a Roth IRA.For this purpose, a “qualified employer plan” includes:

  • A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan),
  • A qualified employee annuity plan (section 403(a) plan),
  • A tax-sheltered annuity plan (section 403(b) plan), and
  • A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state.


Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA.

Contributions not reported. You do not report Roth IRA contributions on your return.
Question: Can a person make a contribution to a SEP-IRA and a Roth IRA, too?

  • You can make a contribution to a SEP-IRA and a Roth IRA.
  • However, neither a SEP IRA or a SIMPLE IRA can be designated as a Roth IRA.
  • Your SEP IRA contribution and Roth IRA contribution can not be made to the same IRA.
  • If you have both a Roth IRA and a SEP IRA, it can affect the contribution limits.
  • See here for the requirements to contribute to a SEP and a Roth IRA.
Additional Information: (on the IRS Site)