RetireSimply's Guide to Roth IRA.
...it probably is.
In the personal finance world, double taxation occurs when an individual uses after-tax dollars to make investments and the return generated by those investments is taxed as well (again!).
Roth IRAsavoid double taxation if used correctly.
James is a young employee eager to begin investing. James decides to open a personal account without
researching his options. James makes $35,000 per year as a junior web designer. After paying total taxes of $5,000, James decides he
is able to contribute a lump sum of $3,000 into his investment account. After 5 years, James is happy to know that his $3,000
investment has grown to $4,200. Appreciating the $1,200 of earnings, James withdraws the $4,200 to make a down payment on a
When James withdraws his total sum, he will be taxed on his $1,200 gain.
If you converted or rolled over amounts to your Roth IRAs in 2010 and did not elect to include the entire amount in income in 2010, you must include part of the amount in income in 2011.