However, if youâre curious, there is a fascinating system behind ABA numbers. The ABA number is like an address that tells everybody where to find your account. ABA numbers are also known as routing transit numbers (RTNs). âABAâ is used because the American Bankers Association (ABA) assigns the numbers to banks.
In contrast to a traditional IRA, contributions to a Roth IRA are not tax-deductible. Withdrawals are tax-free under certain conditions (for example, if the withdrawal is only on the principal portion of the account, or if the owner is at least 59Â½ years old).
Roth IRA contributions are not tax deductible. The money put into a Roth IRA container will not further reduce your taxable income. This is referred to as an âAfter-Taxâ contribution. If your taxable income is $50,000 and you make a $3,000 Roth IRA contribution, your taxable income is still $50,000. Once funds are distributed (withdrawn) from the Roth IRA container they are tax FREE.