An individual retirement account (IRA) for USA citizens/taxpayers that allows individuals to direct pretax income, up to specific annual limits, toward investments that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Traditional IRA. Contributions to the Traditional IRA may be tax-deductible depending on the taxpayer's income, tax-filing status and other factors.
Other variants of the IRA include the Roth IRA, SIMPLE IRA and SEP IRA.
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