1. No tax deduction for Roth contributions
2. No taxation of Roth distributions
3. Tax-free and penalty-free access to past contributions in the event of any emergency, medical needs or college costs
4. No required minimum distribution

Roth Rules:

• Anyone with earned income may open and fund a Roth IRA. The current maximum annual contribution limit is $5,000 (or $6,000 if you are age 50 or older).
• Allowable contributions are phased out when modified adjusted gross income exceeds $167,000 (for 2010) for married couples filing a joint tax return ($105,000 for single filers). No contribution is allowed if modified adjusted gross income exceeds $167,000 for married filers ($120,000 for single filers).
• You can roll over your old 401(k) retirement assets directly into a Roth in 2010, irrespective of your level of income; however you will have to pay income tax on the amount rolled over.
• You are not required to make any Roth distributions during your lifetime. Thus a Roth is a great way to pass along tax-free wealth to your children.
• You can make a Roth contribution even if you are a participant in a separate employer-sponsored retirement plan.
• Five-Year Rule: Earnings from a Roth withdrawn within the first five years will be subject to a 10% penalty and income tax if you are under age 59 1/2 at the time of the withdrawal. If you are 59 1/2 or older and withdraw Roth earnings during this five-year period you will only be subject to income tax on the earnings withdrawn.
• You can convert traditional IRA funds into Roth IRA funds. You will have to pay income tax on the taxable conversion amount. If you do a conversion in 2010, you may elect to pay the income tax in years 2011 and 2012.

I wish to thank the 22 year old Congressional staff members who write the tax code and regulations, the IRS for their incomprehensible explanations thereof and the tax court rulings for making the U.S. income tax system as complex as it is, thus affording me and many other CPAs the opportunity to make a living in a completely unnecessary field.