Appleby

According to the IRS, contributions to a Roth IRA can be taken at any time- tax and penalty free because no deduction was allowed for the contribution. In addition, the IRS established what is referred to as 'ordering rules'. These ordering rules sate that distributions from Roth IRS are taken in the following order -Contributions -Conversions and then -Earnings. if you withdraws $4,000 it will be taxed and penalty free. If you take a distrbution of $4,100, of this amount $4,000 will be tax and penalty free. However, the $100 will be assesed as follows: 1. 10 % penalty because your are under the age of 59 1/2 ( unless you have an exception such as permanent disability, buying a first home, ext. The exceptions are listed in IRA publication 590 which can be found at http://www.IRS.gov. 2 You will be paying ordinary income taxes on the $100 because you have not held the Roth IRA for five years.

The deadline for establishing the education IRA is December 31 for the year for which it is established- the deadline for funding the education IRS is also December 31 - of the year for which the IRA being funded. while the IRS has not stated explicitly the deadline for establising an education IRA, the fact that the IRS Form 5498 for Education IRA contirbutions must be issued to the IRA owner by Janaury 31 supports the December 31 deadline. - This is unlike participant contributions to Roth and Traditional IRAs, for which the 5498 must be issued by May 31. In summary, the last day to fund an education IRA for 2000 WAS December 31, 2000.