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).
Unlike 401k or Traditional IRA contributions, Roth IRA contributions are not tax deductible. According to the Roth IRA funding rules established by the IRS, all your contributions must be made with after-tax dollars. For example, letâs say you earn $40,000, and youâre in the 25% tax bracket.