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).
Each year you can make a non-deductible IRA contribution and then convert that non-deductible IRA to a Roth. You can convert your non-deductible IRA to a Roth in the same year you make the contribution. When you convert an IRA to a Roth IRA you pay taxes on any amount that is converted that is above your basis.