The information set forth below is intended only as a brief, general overview of certain federal income tax provisions. It should not be considered tax, legal, or investment advice. Domini Social Investments LLC, DSIL Investment Services LLC, and their affiliates and agents are not tax advisors, and do not provide tax advice.

 

Each person’s financial situation is unique. All information and examples provided here are for general illustrative purposes only, and are addressed in general to a hypothetical reader, not to you specifically. Tax law is complex, subject to change at any time, and has many rules, details, and exceptions. State and local tax law varies from federal tax law. To learn about federal tax law and rules, details and exceptions concerning IRAs, you should read IRS Publication 590 “Individual Retirement Arrangements (IRAs)” available at www.irs.gov or by calling the IRS at 1-800-TAX-FORM (1-800-829-3676). If you have questions and for tax advice, you should consult a financial or tax advisor before acting.

 

Can I establish a Roth IRA?
Generally, if you have taxable compensation (includes alimony), and your income is below a certain level, you can establish a Roth IRA.

 

What are the age limits?
There are no age limits. A parent or guardian of a minor child may establish a Roth IRA on behalf of the minor child as long as the minor child has taxable compensation for the taxable year for which the contribution is made. You can contribute to a Roth IRA at any time before or after age 70½, as long as you or your spouse has taxable compensation, below a certain level, for the taxable year for which the contribution is made.

 

Is my Roth IRA contribution tax-deductible?
Contributions to Roth IRAs are not tax-deductible.

 

If I am covered by a retirement plan, am I eligible to open a Roth IRA?
You may have a Roth IRA even if you are covered by a qualified pension, profit-sharing, or other retirement plan, if your income is below a certain level.

 

How much can I contribute to a Roth IRA each year?
For 2009, people with income below the levels set forth below can contribute up to $5,000 annually or 100% of their earned income, whichever is less. Alimony is counted as taxable compensation, but pension and investment income are not. The $5,000 limit applies to total contributions made to all IRAs (Traditional and Roth).

 

If you reached age 50 before or during 2009, you may be able to make an additional catch-up contribution.

 

Year	Annual IRA Contribution Limit
2008 & 2009	$5,000

 

How does my income affect my eligibility to contribute?

The maximum annual regular contribution limit per individual is phased out depending upon filing status and modified adjusted gross income (AGI).

 

If you are single, your contribution limit of $5,000 begins to phase out when your modified AGI reaches $105,000 and is zero beginning at $120,000. If you are married, filing jointly, your contribution limit of $5,000 begins to phase out when your modified AGI reaches $166,000 and is zero beginning at $176,000.

 

Please refer to the worksheet provided by the IRS (Form 8606 Instructions) to figure out your maximum contribution. For details on how the income limits work, see the Roth IRA Disclosure Statement.

 

Can I contribute more if I am 50 years or older?

If you are age 50 or older you can play “catch-up” with your retirement investments by contributing extra amounts to your IRAs. The “catch-up” provisions apply to anyone who meets the age requirement and is otherwise eligible to contribute to an IRA.

 

Year	Catch-Up Contribution Limit	Total Contribution (50+ yrs) Limit
2008 & 2009	$1,000	$6,000

 

What if I don't have $5,000?
The law doesn't require any minimum. You can start a Roth IRA at Domini Social Investments with as little as $1,500. If your taxable compensation is under $5,000, you can contribute all or part of it to a Roth IRA.

 

When can I contribute?
You can open a Roth IRA, or contribute to an existing Roth IRA, at any time. In order to apply to a given tax year, contributions may be made from January 1 of that year up to the tax filing date of the following year. The tax filing date is the normal tax deadline, even if you have received an extension beyond that date for filing your tax return. For tax year 2008, you can make contributions until April 15, 2009.

 

What if both my spouse and I have earned income?
If both of you have earned income, you can establish separate Roth IRAs and can each contribute up to $5,000 for the 2009 tax year (or $6,000 if you each reach age 50 before or during the year). If your combined income is less than your combined limits, the combined Roth IRA contributions are limited to 100% of your taxable compensation.  

 

What if my spouse doesn't work?
If one spouse has little or no earned income, a Roth IRA can be established based on the income of the higher-earning spouse. In this case, the combined total contributed may be up to $10,000 for the 2009 tax year (or $12,000 if each of you reaches age 50 before or during the year). The total may be divided between the two accounts in any way desired, so long as neither account receives more than $5,000 (or $6,000 if each of you reaches age 50 before or during the year). If your combined income is less than your combined limits, the combined Roth IRA contributions are limited to 100% of your taxable compensation.  

 

Can I have a Traditional IRA and a Roth IRA at the same time?
Yes. You can have a Traditional IRA and a Roth IRA at the same time. Further, you can make contributions to a Traditional and a Roth IRA in the same year. However, your total annual contribution to IRAs (Traditional and/or Roth) cannot exceed $5,000 per person in any year. For example, you may contribute $1,500 to your Traditional IRA and $3,500 to your Roth IRA in the same year. If you are age 50 or over, you may make an additional catch-up contribution.

 

Can I transfer an IRA from another company to Domini?
You can transfer a traditional or Roth IRA from one mutual fund company to another. To transfer an IRA from another company to Domini, please visit Account Maintenance Forms and select “IRA Transfer Form.”

 

Can I roll over an account such as a 401(k) plan to a Domini Roth IRA?

No. Through a rollover, you can move assets from an employer-sponsored retirement plan account, such as a 401(k) or 403(b) plan, into a Domini Traditional IRA. You cannot roll over money directly from a 401(k) or 403 (b) plan into a Domini Roth IRA. You may convert your rollover IRA into a Roth IRA if you are eligible to do so. For more information, please see our 401(k) Rollover Information page. 

 

Is there a fee specifically related to Domini IRA accounts?
There is an annual $10 maintenance fee for Domini IRA accounts. In addition, although the Domini Funds Investor class shares are no load, certain fees and expenses apply to a continued investment. These are described in the Prospectus.

 

 

If your company offers a SEP or SIMPLE retirement plan, call 1-800-582-6757 to ask how to add the Domini Funds to your plan.

 

The Domini Funds are subject to market fluctuations and are not insured. You may lose money. Investment return and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost.