Truth 4. Earned income

One of the basic eligibility requirements for both a Roth and a traditional IRA is that you must have earned income in at least the amount of your contribution to the IRA, which means that for 2009, you are able to contribute as much as $5,000 if you are younger than age 50, or $6,000 if you have reached the magic age of 50. Beginning in 2009, these figures are indexed for inflation.

In determining what constitutes earned income, however, we do not use Webster’s Dictionary, but rather that clarion of clarity, the Internal Revenue Code. ...

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