Locally Owned, Locally Operated

Educations Accounts:

    The Coverdell Education Savings Account is a nondeductible account that features tax-free withdrawals for a very specific purpose--a child's education expenses.

    These accounts were formerly known as Education IRAs, and at first glance, a CESA my look similar to traditional or Roth IRAs.  Higher education distributions are also permitted from these accounts, but while qualified higher education distributions from a traditional or Roth IRA are only penalty tax free, the same distributions from a CESA are penalty free and federal income tax free.  Consult your tax or legal professional for further information regarding state or local income taxes.

The total aggregate contribution into one or more CESAs on bealf of a child is $2,000 a year.

Individual Retirement Accounts (IRAs):

Roth IRA:
    A Roth IRA is an individual retirement account that allows only nondeductible contributions, but features tax-free withdrawals for certain distribution reasons after a five-year holding period.  The terms "tax free" means free from federal income taxes.

    There are two requirements for eligibility to contribute to a Roth IRA:  you must have compensation (or your spouse must have compensation) and your modified adjusted gross incoe (MAGI) cannot exceed certain limits.

Tax year            Maximum Contribution Amount            Catch-up Amount
2007                 $4,000                                                 $1,000

Traditional IRA:
    If you are younger than age 70 1/2 for the entire tax year, and have compensation, you are eligible to establish a traditional IRA.  Compensation is the salary or wages you receive as an employ.
Tax year            Maximum Contribution Amount            Catch-up Amount
2007                 $4,000                                                 $1,000

SIMPLE:
    A SIMPLE, or Savings Incentive Match Plan for Employees of Small Emplyers, is a salary reduction arrangement similar to a 401(k) plan.  However, SIMPLE contributions are deposited into a unique SIMPLE IRA.  This IRA can only accept contributions under a SIMPLE. No other IRA contributions are permitted.

Tax year            Maximum (Deferral Limit)            Catch-up Amount
2007                 $10,500                                      $2,500