Question

An advantage of Roth IRAs

a)They reduce taxable income in the year of contribution.

b)They can be passed from generation to generation without any estate or income tax implication.

c)One’s taxable income in retirement is reduced by the withdrawals from the account.

d)There is no tax on Roth withdrawals in retirement when tax rates are often higher.

Which of the following can you deduct from taxable income if you do not itemize:

a)Medical Expenses

b)Charitable contributions.

c)Mortgage interest.

d)Property taxes

e)IRA contributions

Answer 1

Before getting into advantages of Roth IRA, Let us understand what is Roth IRA

Any contributions made to the Roth IRA aren’t tax deductible because you pay the taxes immediately. But you can also withdraw money during your retirement, tax-free. This can give you a lot of added income when you’re no longer employed full-time. Furthermore, Roth IRA withdrawals aren’t subject to the same IRS laws on income tax.

The main advantages of Roth IRA are its flexibility, the fact that you can keep your money in your account as long as you like, and the ability to save while you’re retired.

When it comes to flexibility, the Roth IRA is king. You can withdraw money without paying any taxes after you reach 59.5 years of age. As long as the account has been open for at least five years, there are no penalties to contend with.

There are no mandatory withdrawals. Traditional IRAs require that you begin withdrawing money once you reach age 70 ½. Roth IRAs don’t have any withdrawal requirements at all. You can even pass them on after you die.

SO the answers would be they can be passed from generation to generation

Second part of the question

IRA contributions can be deducted from taxable income even after they are not being itemized