If you are under age 70 1/2 for the entire tax year and have compensation, you are eligible to establish an IRA, even if you already participate in any type of government plan, tax-sheltered annuity, Simplified Employee Pension plan, or qualified retirement plan (pension or profit sharing) established by an employer. 

Compensation is the salary or wages you receive as an employee. If you are self-employed, compensation is your net income for personal services performed for the business. All taxable alimony is considered compensation. Passive income such of interest, dividends and rental income is not considered compensation for purposes of funding an IRA. 

You may deposit any amount up to 100 percent of your compensation or $5,000 per year, whichever is less. IRA owners age 50 and older are eligible for a "catch-up contribution" in the amount of $1000 provided they have eligible compensation to support the additional amount. 

All earnings on your Traditional IRA contributions (deductible and/or non-deductible) remain tax deferred until you make withdrawals from the account. 

Deductibility of your deposit is based on whether or not you are an active participant in an employer-maintained retirement plan and, if so, your adjusted gross income and income tax-filing status. You may be eligible for the maximum deduction, a partial deduction or no deduction. 

You can still make nondeductible contributions to your IRA. 

You can withdraw funds from your IRA without the 10 percent IRS early distribution penalty any time after you reach age 59 1/2 or when the distribution qualifies for an exception under IRC Sec 72(t). When you reach age 70 1/2, you must begin to take minimum required withdrawals or hefty penalties will be imposed by the IRS. 

If you are over age 59 1/2, simply include the taxable portion of the amount withdrawn (generally deductible contributions and all earnings) as income. However, if you are under age 59 1/2 and do not meet one of the exceptions, you must also pay a 10 percent IRS penalty for early distribution. 

Your named beneficiary(ies) will receive the entire proceeds of the account. The manner in which the account is paid can be left to the election of the beneficiary(ies). 

If you have compensation and your spouse has no compensation or elects to be treated as having no compensation, your spouse can establish a Spousal IRA and deposit up to 100 percent of your compensation or $5,000, whichever is less. The total combined contribution to your IRA and your spouse's IRA may not exceed your compensation for the tax year of contribution. 

There are two methods you can use to move funds from one IRA to another: rollover and transfer. Generally a recipient has 60 calendar days from the date of receipt to roll over the distribution to another IRA. Rollovers between IRAs may not be made more frequently than once during a 12-month period. Transfer and rollover contributions are not deductible and will not be applied against the $5000 IRA contribution limit. 

IRAs for the taxable year can be opened any time between January 1 and the date your tax return is due for the year, excluding extensions. This due date is normally April 15 of the following year. 

The Roth IRA gives you the ability to invest your after-tax dollars today, let the investment grow tax-deferred, and take qualifying withdrawals tax-free. 

Unlike a traditional IRA, there is no 70 1/2 age limit on making contributions. You simply need to have earned income equal to the amount you contribute up to a maximum of $5,000 ($10,000 combined for spouses) per year. 

Yes. There are specific rules that govern the process of rolling over funds from a traditional IRA to a Roth IRA. Some of these rules include: your modified adjusted gross income (MAGI) must be $100,000 or less; if you are married, you must file a joint income tax return; you must pay taxes on all pre-tax dollars you move; the conversion rollover must be completed within 60 days. 

Unlike the traditional IRA, there are no required minimum distributions at age 70 1/2. Your earnings can continue to grow until you need them. There are special requirements when these plans pass to your beneficiaries.