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Chapter 2 Qualified Retirement Plan 

An eligible retirement plan is either a traditional IRA, eligible employer plan, or Roth IRA.

A "traditional IRA" is an individual retirement account that accepts before-tax dollars.  You will not pay tax on the money you transfer to a traditional IRA until you withdraw it.  A traditional IRA is described in § 408(a) of the I.R.C. or an individual retirement annuity described in I.R.C. § 408(b).  It does not include a Roth IRA, a SIMPLE IRA, or a Coverdell Education Savings Account (formerly known as an education IRA).

An "eligible employer plan" includes a plan qualified under Internal Revenue Code (I.R.C.) § 401(a), including a § 401(k) plan, profit-sharing plan, defined benefit plan, stock bonus plan, and money purchase plan; an I.R.C. § 403(a) annuity plan; an I.R.C. § 403(b) tax-sheltered annuity; and an eligible I.R.C. § 457(b) plan maintained by a governmental employer.

A “Roth IRA” accepts only after-tax dollars, but provides tax-free earnings.  In addition, there are certain rules and restrictions that apply to a Roth IRA. You are not eligible for a Roth transfer if either of the following conditions applies:  (1) your modified adjusted gross income is over $100,000 or (2) you are married and file a separate return.  Further, you must pay taxes on the funds you transfer to a Roth IRA; the tax liability is incurred for the year of the transfer.


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