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Which IRA Is Tax Deductible?

You’ve decided to invest in an Individual Retirement Account (IRA) but are wondering which IRA is tax deductible. While Traditional IRAs are tax deductible, a Roth IRA also offers a tax benefit.

Choosing the best IRA for your needs includes understanding what contributions qualify for a tax deduction.

What Is an IRA?

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An IRA is a financial product designed to help Americans save for retirement. Unlike a 401(k), which is an employer-sponsored plan, anyone can open an IRA as long as they have an income.

There are two primary kinds of IRAs: Traditional IRAs and Roth IRAs. If you’re wondering which IRA is tax deductible, keep reading to learn about the key similarities and differences between the two.

Traditional IRA

Here are the key features of a Traditional IRA:

Roth IRA

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The Roth IRA has some characteristics in common with the Traditional IRA—most notably, the dollar limits and time frame for making annual contributions—but there are a few key differences:

The Roth IRA is popular for its flexibility and tax-free disbursements.

Choose Your IRA Today

Synchrony Bank offers a range of financial products, including IRA Certificates of Deposit (CDs) and IRA Money Market Accounts, with competitive rates and minimum deposit requirements—plus award-winning customer service and convenient online access.

Call 1-844-345-5789 to learn more about Synchrony Bank’s savings products and open a tax-deductible IRA today.

Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA.

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Sources:

IRS: https://www.irs.gov/retirement-plans/traditional-and-roth-iras

IRS: https://www.irs.gov/retirement-plans/ira-deduction-limits


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