Traditional IRA or Roth IRA

Do I Pay Taxes on the Earnings?

Traditional IRA - All earnings on your traditional IRA contributions (deductible and/or nondeductible) remain tax deferred until you make withdrawals from the account. They are then taxed as income in the year they are withdrawn. No IRS penalty will be incurred from this IRA prior for the following reasons: 

• after reaching age 59½

• permanent disability

• a first-time home purchase

• in the event of your death

Roth IRA -  No taxes are paid on the earnings provided you withdraw the earnings as part of a qualified distribution. That's the best part of the Roth IRA. When you're ready to take a withdrawal, you pay no taxes on any of the earnings that your money has generated. Qualified tax-free distributions are those taken after the five-year holding period for any of the following reasons:

• after reaching age 59½

• permanent disability

• a first-time home purchase

• in the event of your death

Talk with a Baylake Bank Customer Service Representative near you for more information about Individual Retirement Accounts.

Consult your tax advisor.