With a traditional IRA and earned income below federally determined li

With a traditional IRA and earned income below federally determined limits, the annual contributions

A)

are taxed, but the interest on the fund accumulates tax free.
B)

reduce your taxes, but the interest income on the IRA is taxed in the year it is earned.
C)

reduce your taxable income. The funds in the IRA and the return on the IRA are not taxed until the funds are disbursed in your retirement years.
D)

are taxed once when they are placed in the IRA and again when they are disbursed from the IRA.

 

 

ANSWER

C

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