College student-Roth IRA questions

[moneyignorant111]

Hi,

I'm a college student, about to graduate, who is now starting to worry about her finances after graduation. I've been reading up on things and trying to plan for the future with my savings. A lot of people have been saying it would be a good idea to open up a Roth IRA. I just have a few questions about it before I finally do it.

First, I know you have to be a working student in order to put money into the Roth IRA. I am a student worker at school and have been saving money for the past four years. How much can I put in? Would I have to report this money on my income taxes?

Second, what happens once I graduate and I don't have a job? I'm planning on taking a year off before applying to law school and work may or may not come easily. Could I still add money into the account or I have to wait till I have a job again? Am I required to add money each year?

Hope you can answer my questions!

Thank you.

[Mr Nice Guy]

Hello and welcome. I am also a college student. I currently have a roth IRA.

You do not need to be currently employed to have a roth. I am working as an intern right now and am unable to add more to my IRA, but I can still keep the account open and change investments. The money you contribute to an IRA is money that has already been taxed so you do not need to report contributions (I think, MonkeyMama can you verify?)

You are not required to make additional contributions annually. If you do, you can contribute $5000/year into your ROth IRA (that number is higher if you have reached a certain age.)

[photo]

Originally Posted by Mr Nice Guy

The money you contribute to an IRA is money that has already been taxed so you do not need to report contributions

It's a good idea to do it so that the IRS knows that it is a Roth and not a traditional. If I'm not mistaken, the IRS likes to keep track of these things, as well.

[jpg7n16]

Originally Posted by Mr Nice Guy

You do not need to be currently employed to have a roth.

Maybe not to keep it open, but to contribute, you need earned income that year.

The max is the lessor of $5000, or earned income. And if you earned $0, you can contribute $0.
2012 IRA Contribution and Deduction Limits

The money you contribute to an IRA is money that has already been taxed so you do not need to report contributions

As long as you're talking Roth IRA, you're correct

From: Publication 590 (2011), Individual Retirement Arrangements (IRAs)

Introduction
Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA.

Contributions not reported. You do not report Roth IRA contributions on your return.

Also see:
Roth IRA and form 8606