I would recommend just reading thorugh the pages that go into detail about the 4 different types of IRAs and then when you read the box at the end that summarizes everything, it'll make sense.
General Rule: If it's tax-deductable going into the IRA, then It's taxable when you withdraw it. And if it's taxable going in (ie: not deductable) it's tax free coming out.
The earning generated from the IRA always accumulate tax-free:
Four Types:
Traditional Deductible IRA: Deductible going in; Principal and Interest taxable coming out
Roth IRA: NOT deductable going in; Principal and Interest tax-free coming out
Non-Deductable IRA: Not deductable going in; Principal not taxable coming out, but interest is taxable coming out
Coverdell Education Fund: not deductable going in, tax-free coming out
Maximum tax deductible contributions are 5,000/10,000 Single/Jointly per year between the first three. This means even if you had all of the first three listed above, you can maximum deduct 5/10k. Coverdell isn't part of that maximum calculation and you can deduct up to 2,000 per year.
Honestly, that's pretty much all you need to know at a high level.
Hope this helps!
BEC- 10/5/12- 81
FAR- 11/30/12- 80
AUD- 1/15/13- 89
REG- 2/28/13- 92
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