RETIREMENT  PLANS  

INDIVIDUAL IRA /ROTH                      

Contribution Limit:  The maximum combined contribution to his or her traditional and Roth IRAs is $5,000 for 2008.  An individual at least age 50 by the end of the tax year is allowed to make additional contributions in the amount of $1,000.00. Contributions must be made by the Return due date-no extensions.

Taxation:  Distributions from traditional IRAs are fully taxable.  Distributions from Roth IRAs are nontaxable.

Penalties:  Individual IRAs are subject to a 10% early withdrawal penalty.  A taxpayer must be at least age 59 1/2 to avoid the penalty.  Contributions withdrawn from a Roth IRa are not subject to the early withdrawal penalty, however the earnings portion of nonqualified distributions is subject to tax and a 10% penalty.

SIMPLE IRA

Contribution Limit:  Employee elective deferrals limited to $10,500.00($13,000.00 if age 50 or older).  The employer can either match dollar for dollar employee elective deferrals up to 3% of wages up to $10,500.00 or $13,000.00 if age 50 or older.  This can be reduced to as low as 1% in any two out of five years.

Taxation:  Distributions are fully taxable.

Penalties:  Subject to 10% early withdrawal penalty if distribution is before age 59 1/2 or 25% if withdrawn less than two years from the first date participated in the plan.