Traditional IRA Account

Roth IRA Account

Coverdell Education Savings Account (CESA)

Invest in your future today.  Whether you are just starting to save for retirement or have a plan in place, an Individual Retirement Account (IRA) will help provide additional retirement income while offering tax benefits that other savings plans cannot match.

Community National Bank offers three types of Individual Retirement Accounts: Traditional IRA, Roth IRA, and Coverdell Education Savings Account (CESA).  To determine which IRA is right for you, we recommend that you consult with a personal tax advisor for more detailed information about these IRA options.

Traditional IRA Account
With a Traditional IRA you may defer taxes on your interest earnings and contributions until they are withdrawn. Contributions are tax deductible in the tax year for which they were made. Deductibility for your contribution is based on IRS guidelines.

Eligibility
A Traditional IRA may only be established for an individual.  You may start contributing if you are under age 70 ½ for the year that the contribution is being made.  You (or your spouse) must have earned income from employment equal to or greater than your IRA contribution.

Contribution
The maximum contribution amount that can be made per year is $5,000 or 100% of your earned income, which ever is less. Pension, social security and disability payments do not qualify as earned income. If you are between 50 and 70 ½ you may contribute an additional $1000 each tax year as a “catch-up” contribution. If you are covered by a qualified retirement plan, the amount that you can deduct as a contribution will be reduced if your income exceeds certain levels.

Withdrawal Requirements
In the year in which you turn 70 ½ years old, mandatory minimum distributions from an IRA must begin.

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Roth IRA Account
This plan allows your contributions to grow tax deferred. If you do not withdraw any of the earnings until you have had the Roth IRA for at least five years, those earnings become tax-free. Unlike a Traditional IRA, contributions to a Roth IRA are not tax deductible.

Eligibility
Established only for an individual.  There is no 70 ½ age limit on making contributions. All you (or your spouse) need is to have is earned income equal to or greater than your contribution for the year.

Contribution
The Roth IRA has no maximum age limit for making contributions. You or your spouse can continue to contribute to a Roth IRA as long as one of you has earned income.  Contributions are not tax deductible.  The maximum contribution amount that can be made per year is $5,000 or 100% of earned income which ever is less.  Pension, social security, and disability payments do not qualify as earned income.  If you are between 50 and 70 ½ you may contribute an additional $1000 each tax year as a “catch-up” contribution.

Withdrawal Requirements
There are no minimum distribution requirements to begin taking withdrawals.  There are withdrawal requirements if this plan should pass to a beneficiary.  You may withdraw from a Roth IRA at anytime without a 10% penalty if the below conditions are met:

1. The Roth IRA must be open for five or more years before withdrawal.
2. At least one of the following conditions must be met:

You are disabled when you make the withdrawal You are age 59 ½ or older when you make your withdrawal You are using the withdrawal for a qualified first home purchase Withdrawals are made by your beneficiary after your death

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Coverdell Education Savings Account (CESA)
The Coverdell Education Savings Account is an excellent way to begin saving for a child’s qualified elementary, secondary or higher education expenses. You don’t even have to be the child’s parent to contribute. Friends and family members can make contributions to the account up until the child’s 18th birthday as long as the maximum contribution per child is not exceeded.

Eligibility
Any child under age 18 can be named the beneficiary.  The person contributing to the CESA can be any age and does not have to be related to the beneficiary.  Age restrictions do not apply to children with special needs.

Contribution
Contributions are nondeductible and may be made up to an annual limit of $2,000 per designated beneficiary to age 18.  Earnings in the account are tax-free if the money is used to pay for qualified education expenses.  Contributions can be made at anytime throughout the year.

Withdrawal Requirements
The funds must be used by the time the child reaches age 30 on qualified educational expenses, such as tuition, fees, books, supplies, uniforms, etc.  Assets of this account may also be transferred to the assets of a sibling's Coverdell Education Savings Account.

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Traditional IRA Account

Roth IRA Account

Coverdell Education Savings Account (CESA)

Invest in your future today.  Whether you are just starting to save for retirement or have a plan in place, an Individual Retirement Account (IRA) will help provide additional retirement income while offering tax benefits that other savings plans cannot match.

Community National Bank offers three types of Individual Retirement Accounts: Traditional IRA, Roth IRA, and Coverdell Education Savings Account (CESA).  To determine which IRA is right for you, we recommend that you consult with a personal tax advisor for more detailed information about these IRA options.

Traditional IRA Account
With a Traditional IRA you may defer taxes on your interest earnings and contributions until they are withdrawn. Contributions are tax deductible in the tax year for which they were made. Deductibility for your contribution is based on IRS guidelines.

Eligibility
A Traditional IRA may only be established for an individual.  You may start contributing if you are under age 70 ½ for the year that the contribution is being made.  You (or your spouse) must have earned income from employment equal to or greater than your IRA contribution.

Contribution
The maximum contribution amount that can be made per year is $5,000 or 100% of your earned income, which ever is less. Pension, social security and disability payments do not qualify as earned income. If you are between 50 and 70 ½ you may contribute an additional $1000 each tax year as a “catch-up” contribution. If you are covered by a qualified retirement plan, the amount that you can deduct as a contribution will be reduced if your income exceeds certain levels.

Withdrawal Requirements
In the year in which you turn 70 ½ years old, mandatory minimum distributions from an IRA must begin.

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Roth IRA Account
This plan allows your contributions to grow tax deferred. If you do not withdraw any of the earnings until you have had the Roth IRA for at least five years, those earnings become tax-free. Unlike a Traditional IRA, contributions to a Roth IRA are not tax deductible.

Eligibility
Established only for an individual.  There is no 70 ½ age limit on making contributions. All you (or your spouse) need is to have is earned income equal to or greater than your contribution for the year.

Contribution
The Roth IRA has no maximum age limit for making contributions. You or your spouse can continue to contribute to a Roth IRA as long as one of you has earned income.  Contributions are not tax deductible.  The maximum contribution amount that can be made per year is $5,000 or 100% of earned income which ever is less.  Pension, social security, and disability payments do not qualify as earned income.  If you are between 50 and 70 ½ you may contribute an additional $1000 each tax year as a “catch-up” contribution.

Withdrawal Requirements
There are no minimum distribution requirements to begin taking withdrawals.  There are withdrawal requirements if this plan should pass to a beneficiary.  You may withdraw from a Roth IRA at anytime without a 10% penalty if the below conditions are met:

1. The Roth IRA must be open for five or more years before withdrawal.
2. At least one of the following conditions must be met:

You are disabled when you make the withdrawal You are age 59 ½ or older when you make your withdrawal You are using the withdrawal for a qualified first home purchase Withdrawals are made by your beneficiary after your death

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Coverdell Education Savings Account (CESA)
The Coverdell Education Savings Account is an excellent way to begin saving for a child’s qualified elementary, secondary or higher education expenses. You don’t even have to be the child’s parent to contribute. Friends and family members can make contributions to the account up until the child’s 18th birthday as long as the maximum contribution per child is not exceeded.

Eligibility
Any child under age 18 can be named the beneficiary.  The person contributing to the CESA can be any age and does not have to be related to the beneficiary.  Age restrictions do not apply to children with special needs.

Contribution
Contributions are nondeductible and may be made up to an annual limit of $2,000 per designated beneficiary to age 18.  Earnings in the account are tax-free if the money is used to pay for qualified education expenses.  Contributions can be made at anytime throughout the year.

Withdrawal Requirements
The funds must be used by the time the child reaches age 30 on qualified educational expenses, such as tuition, fees, books, supplies, uniforms, etc.  Assets of this account may also be transferred to the assets of a sibling's Coverdell Education Savings Account.

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