IRA Roth IRA Strategies

Question 1

What are the income limits for contributing directly to a Roth IRA for single filers in 2024?

Accepted Answer

Phase-out begins at $146,000, ends at $161,000

Answer

Phase-out begins at $130,000, ends at $145,000

Answer

Phase-out begins at $138,000, ends at $153,000

Answer

Phase-out begins at $153,000, ends at $168,000

Question 2

What is the five-year rule for Roth IRA qualified distributions?

Accepted Answer

The Roth IRA must have been open for at least five tax years before distributions are qualified

Answer

Contributions must be held five years before withdrawal

Answer

Earnings can only be withdrawn after five years of employment

Answer

Conversions must be held five years regardless of age

Question 3

What is the order of distributions from a Roth IRA (ordering rules)?

Accepted Answer

Contributions first, then conversions, then earnings

Answer

Earnings first, then conversions, then contributions

Answer

All funds are distributed proportionally

Answer

Oldest contributions first

Question 4

Are Roth IRAs subject to required minimum distributions (RMDs) during the account owner's lifetime?

Accepted Answer

No, Roth IRAs have no lifetime RMDs for the original owner

Answer

Yes, starting at age 73

Answer

Yes, starting at age 72

Answer

Only if the balance exceeds $1 million

Question 5

What is the 'backdoor Roth IRA' strategy?

Accepted Answer

Making a non-deductible traditional IRA contribution and then immediately converting it to a Roth IRA

Answer

Converting a 401(k) directly to a Roth IRA

Answer

Contributing to a Roth IRA through an employer plan

Answer

An illegal tax evasion scheme

Question 6

If a Roth IRA owner withdraws only contributions (not earnings) before age 59½, what is the tax treatment?

Accepted Answer

The withdrawal is tax-free and penalty-free

Answer

10% penalty applies plus ordinary income tax

Answer

20% withholding applies

Answer

It is allowed only if used for a qualifying purpose