Individual Retirement Account
Also found in: Dictionary, Thesaurus, Medical, Legal, Financial, Acronyms, Wikipedia.
Related to Individual Retirement Account: Roth Individual Retirement Account
Individual Retirement Account(IRA), tax-sheltered retirement plan, originally created (1974) to assist individuals not covered by company pensions. Under the U.S. tax law of 1981, IRA provisions were liberalized to allow individuals to contribute up to $2,000 per year (up from $1,500) to such accounts, and coverage was extended to employees already in corporate pension programs. These contributions are deductible from federal income taxincome tax,
assessment levied upon individual or corporate incomes. Although personal incomes were occasionally taxed in medieval Italian cities, the income tax is essentially a modern form of taxation.
..... Click the link for more information. payments. IRA monies may be placed in high-yield investments, with taxation deferred until money is withdrawn after retirement. In 1998, Congress instituted the Roth IRA, in which the earnings are tax-free but there are no tax-deduction benefits for the contributions made each year.